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VA mortgage question

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As an Army veteran, my husband qualifies for a VA loan.  We have an option to purchase the home we are currently renting.  We feel that the owner is going to list the house for sale if we don't get a mortgage going pretty quickly. We have improved my husband's credit scores from a 505 in December 2017 to a 609 this month.  Is there a broker or company that will work with this credit score?  Gross income is about $11,000 per month. Is there any difference as far as assistance in qualifying (rapid re score or tools like that to help us qualify) between internet and face to face applications? Thanks for any constructive input from this group, we appreciate it.

Edited by Jmdorozco
added info

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Rapid rescore generates a new FICO score after something has changed since the last report that was pulled and scored (for example, you pay a collection or make a large credit card payment), but before the data furnisher has reported the change to the bureau(s).  

 

Depending in the change(s), rapid rescore may result in a higher or a lower score, and potentially no change at all.  

 

That's all it is.

 

What is weighing down the scores (and where did you get the scores?)?

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Hi Jmdorozco,

 

Yes there are lenders that will work with your scores & even some who will help you raise your scores with a rapid re-score to improve your rate & your chances of getting approved once your file hits underwriting.

A lot of lenders will not provide rapid re-scoring services because it costs $40+ per account, per credit bureau & they can't charge the consumer for it.

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There are 4 unpaid (4 yr old ish) collections accounts.  I am unsure whether to pay them or leave them alone for now.  They total about $2,000.  He has 2 credit cards and a line of credit at our credit union, as well as 2 car loans, all current on payments for the past 12 months, except for 1 car payment.    I just paid off one credit card, so his usage shows as 28% of total credit.  We have Discover card free score 621 (Experian Fico 8), Cap 1 602 (Trans Union), Credit Sesame 602 (Equifax), Credit Karma has 602 for Trans Union and 591 for Equifax.

 

Your thoughts on mortgage pre approval within 30 days?  

Edited by Jmdorozco
corrected number

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Hi Jmdorozco,

 

You typically don't want to mess with collection accounts unless you're told to by an underwriter or you can get the collection account deleted. Just paying them off doesn't do anything for your scores for a while so you want to focus on the things that will impact the scores right now.

 

What was the balance & limit in the credit card you just paid off & what is the balance & limit for the other 2 accounts?

 

I think you have a good chance of getting pre-approved right now & as long as you keep working on bringing your scores up it should improve over the next 30 days.

 

 

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Indigo card has 0 balance with only 300 limit.

Credit one has $364 balance with 500 limit

The Oregon Community Credit Union credit line has 0 balance with 500 limit

 

Such tiny limits, I know, we had to start somewhere... :(

 

Thank you for your input

 

 

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VAloanmaster,

 

Thank you for the information, it has been very helpful so far!  Is there any advantage to applying with a local broker or bank as opposed to applying on line? (Rocket Mortgage or Quicken Loans, or one of those)?  By advantage, I mean helping us with smoothing the credit challenges or concerns.   I am about ready to choose a lender and get started, but I don't want to "waste" any hard pulls on our credit, I want to use the pull(s) wisely...

Thanks again! 

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On 1/4/2019 at 5:57 PM, Jmdorozco said:

Indigo card has 0 balance with only 300 limit.

Credit one has $364 balance with 500 limit

The Oregon Community Credit Union credit line has 0 balance with 500 limit

 

Such tiny limits, I know, we had to start somewhere... :(

 

Thank you for your input

The balance on CreditOne is KILLING you.  While you are good with only one out of three accounts having a balance, the fact that you are over 70% utilized on one account is probably 30 points at a minimum...and maybe even more with that thin of a file. 

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Okay, I can pay the Credit One off now.  How long should I wait before we apply?  And is it better to apply with a local broker in person, or one of the websites?    

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If you pay Credit One off now, I would wait until it reports a $0 balance to the Credit Bureaus, that is when you will see the score affect of the card being paid off. 

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The benefit to an in person Broker is you have someone to sit down and get recommendations from. I'm an RE Agent and I send my clients to one of 4 Brokers who specialize in different things depending on the clients needs. 

I've closed several deals where the client didn't initially qualify but by working with the Broker they got their files to where underwriting would approve them.

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On 1/16/2019 at 11:22 AM, Jmdorozco said:

VAloanmaster,

 

Thank you for the information, it has been very helpful so far!  Is there any advantage to applying with a local broker or bank as opposed to applying on line? (Rocket Mortgage or Quicken Loans, or one of those)?  By advantage, I mean helping us with smoothing the credit challenges or concerns.   I am about ready to choose a lender and get started, but I don't want to "waste" any hard pulls on our credit, I want to use the pull(s) wisely...

Thanks again! 

Hi Jmdorozco,

 

I would steer clear of the big box banks & look for a small to medium size mortgage banker.

You don't have to worry so much about where the lender is, it just doesn't matter thanks to technology.

Don't worry about your hard pulls, especially if a lender is going to do some rapid re-scoring on your credit.

You can have credit pulled 20 times for a mortgage & as long as the pulls are all in a 30 day period, all of the inquires will count as 1 pull.

 

 

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