Mortgage uphill battle

[Derekfiveo]

This spring I realized that hey, maybe I should look into getting a mortgage and finally owning a house. After first speaking with Wells Fargo I found that they require a 640 middle score.. Im sitting at around 620 as of right now. Also as a police officer there are several home buying programs that can assist me in getting a mortgage with a score as low as 580 (FHA loan). Here is some of the problems I have run across though.

 

1) I have 4 charge off accounts that are approx. 4 years old. 3 credit cards and 1 utility.

 

Now for FHA guidelines I was told that you are not allowed to have charge off accounts on your credit report. Problem being, these accounts total approximately $8,000 which I do not have and find very counter productive towards getting a house if I dump all my money into that.

 

2) If my credit reaches a mid score of 640 I have been told by some that underwriters can look past some of the old delinquent accounts.

 

I am literally teetering right on the edge of hitting 640 mid. Since all my charge offs I have re-established credit and have 3 credit cards, all on time all in check.

 

3)My wife is going to be coming out of bankruptcy with her 3 year mark next year as well, which I understand is the minimum time out of bankruptcy that is required by most banks. She works but I make the money, Her credit is not as high for those obvious reason but continues to get better as time goes on away from her bankruptcy

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Now so far I have briefly spoken with wells fargo, who basically just told me to get more score up to 640, then we can talk FHA. Then I spoke with an assistance program who can help me under 640 but the delinquent charge off's have to be resolved. My dream and goal would be that next summer my wife, son and I are in our own house that we own.

 

I really want to know is, those charge off accounts, are they literally going to prevent me at all costs from getting a mortgage even if I raise my score about a mid score of 640? Secondly would it be better if I spoke with a credit union over a mortgage or would I be looking down the same gun barrel as a large bank such as wells fargo? Honestly, paying off those old credit cards is hopeless, as we all know paying them especially with them being older, only adds salt to the wounds. What should I do? Can I get a mortgage with charge offs at all? where ? how?

 

Should I focus on a Conventional load vs FHA? Does Conventional have more leeway when it comes to charge offs?

Edited June 19, 2013 by Derekfiveo