533 lowest score-will they take the mid score?

[bjvitale]

We will be trying to buy a house in July or August. We have been working on our credit by paying off credit cards and our second car will be paid off in 2 mths. We previously had a lot of lates but by the time we get a house we should have 11 to 12 mths of no lates and all cards paid off. My husband will be getting the loan since we have been trying to boost his score up only.

His lowest is 533 as of right now.(EQ) It came up 34pts in 2 months from paying off one of his cards and being on time with all our debts. He does have some charge offs and I have not had any luck at getting them off. The other 2 are in the 6oo's but I have not checked them since the EQ went up 34pts.

I am not sure how much I can get it to go up by July. We will have his other credit card paid off this month and it should go up more.

Is it possible to get 100% financing and the closing cost rolled in with a score in the 600's? Hoping that the 533 goes to at least 600 by July.

Also do lenders take the lowest score for qualifying or the middle score? I am hoping they take the middle score. Our EQ is way lower than the other 2.

Can someone tell me what LTV is? I read some post and wasnt sure what this was. Also, do they do your score again at closing? I was thinking they only pulled it once.

One more thing. What are the pros and cons to having the taxes rolled into the loan?:wave:

Thanks,
Brandi

[JFW]

I am in the same boat as you. I'm hoping to purchase by Sept., but have the same issue. I did some research and found a program with Fannie Mae called Expanded Credit that the focus isn't really on credit, has available 100% financing, and a reward program for 24 months of positive marks. They have some details about it on Fannie Mae's website, but haven't been able to find the exact specifics on it EG. Credit scores, collections accounts/Judgements.

Maybe somebody here can enlighten us, or maybe you'll have better luck investigating... If you do find anything, keep me posted!

[t&m]

Try not to get too discouraged about your scores.You still have a good bit of time to raise them.I recommend getting Equifax Score Watch,it gives you a true FICO and A FICO simulator ,that will help you figure out what can help raise your scores and what they will be in a few months by paying your bills on time.

I got a Crown Jewelers account w/ a $1500 credit line and according to the FICO simulator it will raise my score anywhere from 20 to 50 points,it also told me that I will get 10 to 50 points for paying down credit cards.I anticipate my husbands scores to be over 700 in the next few months ,they were 540 in Dec.

I read yesterday that mortgage companies are requiring higher scores now for 100% financing.It used to be 580 now it is or will be 620.

Lenders go by the middle score so it sounds like you are on the right track.Just work real hard on cleaning up your reports and maybe try something like opening a Crown Jewelers account for a score increase and keep balances very low.

I have been working on mine and my husbands credit since Dec and I am amazed how far I have come.I even had a forclosure deleted,I wan't to buy a home in May or June.I never thought that his scores would be close to 700 ,I was just shooting for 600 when I started.

Good luck

[t&m]

I had a lot of luck having lates removed with goodwill letters.

I beleive LTV is loan to value and I think it means the price of the loan compared to the what the house appraises for (I think)

I recommend getting an escrow -taxes and insurance rolled in.I didn't have an escrow w/ my first home and it played hell coming up with all of the tax money at the end of the year.There may be better reasons but that was enough for me.

[bbal]

With a score in the 620's there are some of the major investors that will give you 100% financing. My suggestion is unless you are willing to pay PMI that you finance 80/20.

I can help with any scenario you might want me to run for you. Feel free to drop me an email to brentw_public@sbcglobal.net. No obligation, of course. I can just help you run some scenarios to see what it would take to qualify from major investors or from subprime investors.

[MortgageMan]

Lenders are continuing to tighten their guidelines on 100% loans.

The best way to avoid closing costs is to get Seller Concessions. Most lenders will allow up to 3% of the purchase price to pay for the buyers closing costs.

However, if you truly have no money you might consider waiting to save a little as home ownership has costs of its own. Things can and will break.

LTV. Is Loan-To-Value. How much you are borrowing vs the value(or purchase price) of the home.

Most lenders will pull your credit just before closing to make sure you nothing major changed. The score is of little concern at that point if it changed due to the credit pull.

Escrowing taxes and insurance in a loan is just for peace of mind for you and the lender. If you have at least 20% down lenders will allow you to choose to escrow or not. At higher LTVs the lender may REQUIRE you to escrow your taxes and insurance. Taxes where I live come due twice a year. It can be a large bill and does not come six months apart. So one big bill followed by another 2-3 months later. If you are disciplined and save for the bill then you can earn the interest on the money. However, I have clients that prefer to keep it in their mortgage payment so it one less thing to worry about.