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Please help me with my plan of attack for first mortgage

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Hello,

 

Hope all are as safe as can be under the circumstances.

 

My road back has me closer to getting my first mortgage.  Currently I have scores 636 to 653 <---with 62% utilization.  As of last week I have lowered my overall utilization depending on which way you look at it; which brings me to my first question.  

 

Utilization with AU is 44%-----------------AAOA--2 years          (once all new balances are reported)

Utilization w/out AU is 27%---------------AAOA--1.6 years-----thinking this would put my scores in the 660-670 range???

 

My oldest account (without AU) is 2 years 1 month, and youngest is 5 months with others in the middle (no lates all good!!! except last baddy below)

Time to get off the AU, request it removed?

 

If I am understanding correctly, the 30% that utilization(amount owed) carries will outweight the 15% that length of credit history carries thus increase my scores a bit?

 

Which leads me to my next area of concern, the LAST baddy that I have remaining on my credit reports.  It is on 2 of 3 credit bureaus (the one credit report is clean!!).  one report shows it scheduled to fall off Dec2020, the other shows it Feb2021.  The Dec2020 is correct based on DOFD.

 

This is baddy/EVICTION is from the apartment complex I lived in when I lost job unable work/became homeless.  This is $4500 on my credit reports.  

Do I--

-Contact and try to work out something way less $$$ showing it paid especially with it so close to falling off report(without restarting clock!!!!)

-Wait till it falls off report(try early delete request for both items), dispute report with date of Feb with proof of DOFD

-Talk to agent before doing 2 options above

 

I thought about finding an experienced agent with VA loans and let them review my information to see where I am at overall.  I have been at my current location going on 4 years with perfect/on time rental payments.  I will get a letter from my current landlord.  I can probably get positive letter  from the place I was at before current resident regarding rental payments too. 

 

Definitely not opening any new accounts now.  May try few CLI's that don't require hard pulls.

 

I would love to work this all out and get in my first hom/mortgage this year.  I will stay patient.

I am a 100% disabled veteran(in Florida makes home Tax Exempt) and really want to take advantage of the low VA rates right now!!!  I will remain focused; just want to try to take advantage of the low VA rates.  Appreciate as always any advice!!!

 

 

 

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Why the rush to buy a home now? You would get the benefit of building up your savings and see the eviction fall off your account early next year. Letting some of the current pandemic ‘dust’ settle might put you in a stronger position.


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21 minutes ago, damba said:

Why the rush to buy a home now?

 

1 hour ago, fixinmycrediks said:

really want to take advantage of the low VA rates

 

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1 hour ago, fixinmycrediks said:

Currently I have scores 636 to 653

Are these mortgage FICO scores?

 

1 hour ago, fixinmycrediks said:

I thought about finding an experienced agent with VA loans and let them review my information to see where I am at overall. 

I would definitely recommend doing this.

 

 

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Yes---definitely want to take advantage of dropping of mortgage rates "if possible".

 

They are not the mortgage FICO scores, but the valid FICO (not fako) scores  from BOA, DCU, and Experian.

 

I went back and looked at when I purchased FICO report 4/27/2019 Equifax score 651....mortgage FICO 5 score was 695.  It had these Negative Factors which have changed a bit-

 

1. You have a serious delinquency (60 days past due or
greater) or derogatory indicator on your credit report.
2. You have a short credit history.
3. You've made heavy use of your available revolving credit.
4. You have one or more accounts showing missed payments
or derogatory indicators.

 

 

 

 

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A couple of thoughts:

 - Agree with finding someone who is proficient in VA loans and asking for advice.  However, when it comes time to pull the trigger make sure you are getting competitive rates.

 - A lot of mortgages require you to satisfy open collections on your CR.  I am not sure if this is the case with VA loans, however you should be prepared if you move forward and this becomes an issue.

 - Mortgage applications tend to pull the collection roaches out of the woodwork (they know about my previous point and capitalize on people wanting to buy a home and will bend over to do so).  If you have old collections, even those that are not on your report, it is a good idea to apply for a mortgage 6 months or so prior to when you actually want to get the home.  This will give you time to see if anything comes out and deal with it prior to when you're trying to actually buy the house.  That process is stressful enough, no need to add fuel to the fire.

- Make sure you have a good stash of emergency funds before you go into this.  Houses cost a lot, and stuff happens all the time.  You don't want a major repair setting you back.  I am guessing you are planning to put very little to nothing down on this house...it'll be a long time before you have any equity should you need to make improvements/repairs. 

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6 hours ago, fixinmycrediks said:

DCU

This one is a mortgage FICO score.  For underwriting, they'll use the middle of the three.

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Yup. I understand entirely that the OP wishes to take advantage of low VA rates. The truth of the matter is that next year, with better credit scores/money socked away (which you mentioned in your other post), VA rates will still be lower on average than conventional ones. It’s a win-win for the OP to pause a little more until his position (and what’s going on generally in the world) improves.

Can a disabled vet still have the VA fee refunded/waived because of the disabled status? That one of the VA loan options I was unclear of.


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damba,

 

If you are talking about the VA funding fee, yes it would be waived in my situation. The VA allows it to be financed with the loan.

 

Appreciate your thoughts.  I am not rushing in, just pacing myself and seeing possible opportunity to hit an extremely lower window than normal when it comes to VA int/rates.  With this window of opportunity coming up, knowing I am not 100% ready, just seeing how I can fit into that window if possible now to get the benefits from this rare moment.

 

My thought is  catching the VA lowered interest rate window now (next 6 months) will still/could be lower than my improved score a year from now and the interest rate window at that time.  I am trying to catch the sliding scale (interest rate window) at rock bottom.  

 

 Agree with saving more money.  

 

CTSoxFan, appreciate your thoughts and points are definitely noted!!!

 

Thanks CV91915!!!  

 

 

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1 hour ago, fixinmycrediks said:

the VA funding fee, yes it would be waived in my situation. The VA allows it to be financed with the loan.

Those are two different things.

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Posted (edited)
8 hours ago, damba said:

money socked away (which you mentioned in your other post)

Not sure which other post you mean, but I am assuming that because OP is a disabled vet that he has a reliable income stream, which partially mitigates some of the common savings requirements (the portion required to offset a loss of income).

 

With that said, more savings is always better, because homes have a way of demanding thousands and thousands of dollars at a time to remain comfortable and habitable. 

 

And no matter how much you plan, these needs never happen at an opportune time, and they are almost always more expensive than you hope.

 

 

 

 

 

Edited by cv91915

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Not sure which other post you mean, but I am assuming that because OP is a disabled vet that he has a reliable income stream, which partially mitigates some of the common savings requirements (the portion required to offset a loss of income).
 
With that said, more savings is always better, because homes have a way of demanding thousands and thousands of dollars at a time to remain comfortable and habitable. 
 
And no matter how much you plan, these needs never happen at an opportune time, and they are almost always more expensive than you hope.
 
 
 
 
 

It sounds like we agree on everything, basically.

I guess I am just a lot more conservative regarding encouraging someone to take on a mortgage if I don’t hear them outright specify more of the particulars. The most pressing one for me I need to hear first from the OP is “I have 6 mos of savings already set aside just for home repairs”. The other ones are “I have another 3-6 mos of savings set aside for personal emergencies” and “I plan on putting xxx amount toward the house as a downpayment”.


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25 minutes ago, damba said:


It sounds like we agree on everything, basically.

I guess I am just a lot more conservative regarding encouraging someone to take on a mortgage if I don’t hear them outright specify more of the particulars. The most pressing one for me I need to hear first from the OP is “I have 6 mos of savings already set aside just for home repairs”. The other ones are “I have another 3-6 mos of savings set aside for personal emergencies” and “I plan on putting xxx amount toward the house as a downpayment”.


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I don't disagree at all.

 

There just isn't enough time to write 12,000 words with if/then/else statements in every response.

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Agree, working on the 6 months of savings, slowly but surely.  That is where an opportunity comes along (even in misery) that I am weighing all options to see if the risk is low enough etc. etc.

 

What about the AU I mentioned above in original post; I am thinking it is time to cut ties with it. Where I would lose length of AAOA from over 2 years down to 1.6 years but would gain more in my scores with the Utilization going from 44% to 27%, correct???

 

 

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Agree, working on the 6 months of savings, slowly but surely.  That is where an opportunity comes along (even in misery) that I am weighing all options to see if the risk is low enough etc. etc.
 
What about the AU I mentioned above in original post; I am thinking it is time to cut ties with it. Where I would lose length of AAOA from over 2 years down to 1.6 years but would gain more in my scores with the Utilization going from 44% to 27%, correct???
 
 

Lower utilization as much as you can!

Out of curiosity, how comparable will your mortgage payment be to your current rent?


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Posted (edited)

Let me start off answering that by saying, I enjoy doing Cost Anaylsis(self taught and always learning more).  So that answer is of course easy and complicated:)

 

I understand the middle score is used.  If I use my current middle score right now for a mortgage, it would be around $25 more per month over my current rent.  I used the Zillow-estimate of the house I am currently renting which is of a higher value because it is on a canal with access to the gulf.  My scores going up starting next month and forward will push me into higher brackets improving the savings.

 

I have looked at my budget to determine the max I can comfortably spend to stay within reason to know my parameters.  Now, with the VA rates being a bit lower that adds even more house I can purchase or savings in mortgage payment.  I compared the rates from Nov2019 to today's rates to see the difference in the savings opportunities.

 

I have looked at my debt-to-income ratio, reviewed it over the next 3,6,9,12+ months.  I have some items such as storage unit, loan, etc...that are coming to the point of freeing up another $400+ a month.  Which I will adjust into my savings and emergency savings.  I have a budget spreadsheet that accounts for all my bills, savings, emerg-saving monthly allowance for spending, etc... which also calculates the utilization % of each line item and aggregate figures. 

 

I read and learned from the Title 38 Code of Federal Regulations on VA Disability Benefits to file my own claims and successfully fought for my VA 100% disability.  Yes, there are some great VA Advocates out there (many are way overloaded), but I couldn't find one like I had in the past.  I am 6 for 6 with directly helping other veterans obtain what they rightfully deserve with their VA Disability Benefits along with many others with information learned on veteran websites.  I say this so you know I will try and learn all I can about mortgages (along with what I learn here and other various sources) and have the help of an agent for my first house!!!

 

Now, my curiosity is asking, what angle were you looking at when you asked me your question?  Again, just so I can learn!!!!

 

 

 

 

 

 

Edited by fixinmycrediks

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Let me start off answering that by saying, I enjoy doing Cost Anaylsis(self taught and always learning more).  So that answer is of course easy and complicated:)
 
I understand the middle score is used.  If I use my current middle score right now for a mortgage, it would be around $25 more per month over my current rent.  I used the Zillow-estimate of the house I am currently renting which is of a higher value because it is on a canal with access to the gulf.  My scores going up starting next month and forward will push me into higher brackets improving the savings.
 
I have looked at my budget to determine the max I can comfortably spend to stay within reason to know my parameters.  Now, with the VA rates being a bit lower that adds even more house I can purchase or savings in mortgage payment.  I compared the rates from Nov2019 to today's rates to see the difference in the savings opportunities.
 
I have looked at my debt-to-income ratio, reviewed it over the next 3,6,9,12+ months.  I have some items such as storage unit, loan, etc...that are coming to the point of freeing up another $400+ a month.  Which I will adjust into my savings and emergency savings.  I have a budget spreadsheet that accounts for all my bills, savings, emerg-saving monthly allowance for spending, etc... which also calculates the utilization % of each line item and aggregate figures. 
 
I read and learned from the Title 38 Code of Federal Regulations on VA Disability Benefits to file my own claims and successfully fought for my VA 100% disability.  Yes, there are some great VA Advocates out there (many are way overloaded), but I couldn't find one like I had in the past.  I am 6 for 6 with directly helping other veterans obtain what they rightfully deserve with their VA Disability Benefits along with many others with information learned on veteran websites.  I say this so you know I will try and learn all I can about mortgages (along with what I learn here and other various sources) and have the help of an agent for my first house!!!
 
Now, my curiosity is asking, what angle were you looking at when you asked me your question?  Again, just so I can learn!!!!
 
 
 
 
 
 

Glad to hear you are willing to take the time to help other vets navigate the process- passing on your knowledge and experience can be very rewarding.

A friend of mine who was permanently disabled in the gulf war came to mind when I read your post. He ended up being encouraged to buy a lot more house than he needed during a ‘VA mortgage session’ which ultimately set him back financially. It doesn’t sound like that is your situation, thankfully. Good to hear all the prep work on your part.

That said, it is important IMHO to think of the ‘extra house’ you could qualify for as an impractical proposition. Focusing on something more modest can help you improve your net financials even more. Live just across the canal in a nice two bedroom vs right on the canal in a more expensive ‘bargain’ three bedroom that needs a little work (etc.). Especially if you are not in a dual income household and not sitting on significant savings.

I don’t see any significant savings in your case by buying, especially when you also add in cost of ownership. Would your budget permit a 15 year mortgage so you are debt free sooner?


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I probably would agree with your opinion regarding the "extra house" with other circumstances.  I am at a different age/stage/physical conditions.  This gets to the comment cv91915 made "There just isn't enough time to write 12,000 words with if/then/else statements in every response." I have different options I am open to regarding the house/location/and what it offers.

 

While financial benefits are one part of the scope, living and enjoying within your means with what you have available based on your conditions another factor.  The nice 2 bedroom across the street from the canal doesn't allow you to go fishing at will if you can't access another person's property, or a boat ride without the complications that physical conditions might make more difficult/challenging dealing with dropping boat off trailer into water.  The extra house means so much more to a disabled person that doesn't get out much.  A workshop, fishing, enjoying the therapeutic beauty of Florida in your backyard with dolphin, schools of fish, boats etc...does help the mind tremendously when dealing with chronic pains.  Having the means so close to you when you have a few good hours or a good day goes along way in mind/soul with these items closer to you.  You learn to adapt to make the best with what you got and can do based on your circumstances.  So not impractical to me as it is within my budget.

 

Significant savings in buying----the mortgage is working for me to build equity from my own money into my own house.  Dual income is an option, she hasn't put a ring on my finger yet!!!   I can afford this alone, when the ring thing happens it will benefit us even more.  15 year mortgage, no--maybe after the ring.

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