Mortgage after divorce with bad credit

[newbegin2]

I'm getting divorced and looking to buy another house for me and my daughter. My credit is really bad right now (prob high 500s) due to three recent mortgage lates because my spouse wasn't making the payments. We made an agreement with the mortgage company to put those payments at the end of the mortgage and have resumed making regular, on time, payments. I do have credit card debt which I am actively working to pay off. I took a second job to do this. I am hoping to walk away from our current house with about with 200K and plan to put 150K on a new house that would be about 400K so I would need a mortgage for roughly 150K. Is this even possible? I am working on getting my scores up. Just not sure how long it will take to get to 620 which used to be the magic number. Not sure anymore. I didn't know if they could see that I always made payments on time and then showed the separate agreement at the time the mortgage want paid if that would make a difference or if I'm just SOL. Any advice would be great!

[liverichly]

What months were the mortgage late payments and what was the severity of the late payment?  30+ days, 60+ days, 90+ days, or 120+ days?

 

As long as your income qualifies, then even if the mortgage late payments were recent (within 12 months) and 60 or 90 days late, then there are loan programs referred to as "Non-QM" (stands for Qualified Mortgage) that will allow someone to purchase as long as they have a large enough down payment, which putting $250k down on a $400k sales price is typically large enough.

 

If they were over 12 months ago then it may even be possible you'd qualify for an FHA mortgage.  FHA mortgages can approve you two different ways, first is an automated underwriting approval which can be more lenient on mortgage payment history, then the other option is manually underwriting but going that route requires no more than two 30-day mortgage late payments in the past 24 months.  Putting a large down payment increases people's chances of qualifying via automated underwriting.

 

To use income from your second job to qualify you'll need to have a history of working 2 jobs at the same time for the past 2 years.