Post # 1
Okay here is my situation- DH (when he was SO) & I applied for a home loan together in about November of 2011.
I have quite a large down payment, but because of my age at the time I had literally no credit. Like I had just gotten a credit card in september lol but Darling Husband has a pretty decent credit score, mid 700’s.
We applied for an FHA loan & it drug out (because of our d-bag guy we were working with & his month long Christmas vacation) and it ultimatley got denied- reason being my credit & that both Darling Husband and I hadn’t been at our jobs for 2 years yet (..seriously bank)
Anyway, my question is this: how soon is too soon to re-apply for a loan?
Since then I have had our water/electricity in my name (since October) my name is on the apartment (Since September) and i’ve been making multiple payments on my credit card each month trying to pay it off quickly (since September), I also have 20% downpayment of the loan we’re requesting- and FHA in North Carolina only requires 5% or so.
Darling Husband and I want out of our apartment -BAD- and would love to own a home. Any advice? Are we rushing this?
Post # 4
It’s been 6 months since you last applied, and it seems like you’ve stepped up your game since then & now will look “more responsible” to the bank.. I would say go ahead! I know how you feel though, buying our house was a nightmare.. I think I cried every day for 2 months.. the banks make it so hard on people.. but good luck! I would try & go to pre-approved, possibly at another bank.. avoid that stupid one lol (i used to work @ a bank.. so believe me, i know where you’re coming from!)
Post # 5
@X0JLYNN03: Ah! I cried too when we didn’t get approved, I literally stomped my foot and then laughed at myself for acting like a baby and a snotty mess, it was embarrasing.
Is there a bank that is easier to get these type of loans at? We went with Wells Fargo the first time.
Around us there is Wells Fargo, BB&T and Bank of America- any suggestions?
Post # 6
Can you ask your original banker what he recommends? It’s probably better to ask someone who knows all the details about your situation, anyway.
Warning: This statement isn’t trying to be mean, just realistic:
I agree that you look “more responsible” now, but you’re probably looking to take out a sizeable home loan (in the six figures, I’m guessing), and six months of paying an electric bill and credit cards isn’t going to balance that out right away. I just don’t know how long they’d need to balance it out.
Post # 7
@abbie017: We applied for a loan of about $106,000. Housing isn’t incredibly expensive here
Post # 8
I’m certainly not an expert, but I might wait a bit longer if I were you.
Six months is enough time for your credit score to improve by a few points, but not substantially. By September of this year, you’ll have had your credit card for a year, right? I think being able to measure your credit history in years instead of months is good.
That said, you’ve worked hard to improve your situation over the past six months, so it may be worth talking to someone with a little more authority on the topic. It’s definitely a good thing that you have a sizeable downpayment and that your Darling Husband has good credit.
Post # 9
@Kkaattii: Even so, that’s a big loan for someone with less than 6 months of credit history. I’m not trying to be a jerk, just realistic. They need some sort of backing to show that you’re a good candidate for a loan. Have you run your credit report to see what number comes up? You’re entitled to one free one each year. I googled FHA loans – and on their website, you have to have a score greater than 500 to get a loan, and higher than 579 to get the maximum potential (http://www.fha.com/fha_article.cfm?id=200).
This talks about what goes into your FICO score: http://www.myfico.com/crediteducation/whatsinyourscore.aspx
Overall info on FICO: http://www.myfico.com/crediteducation/whatsinyourscore.aspx
Post # 10
When we talked to our bank about purchasing a home last November, she asked us some questions and we set up a financial plan with her to get us to home ownership. It sounds like while you may have revolving credit you don’t have loan credit. (My Darling Husband problem). Her recommendations for us were to:
1. Each of us get one CC in our names. (Done!)
2. I have student loans ($6000 thank you parents!) Darling Husband needs to get a secure loan to up his score. We did not do this because we are planning on purchasing a car. But this is something you may look into. We were told basically you put in $1000 in a CD and borrow against yourself and pay it off in about 6 mths (She recommended putting the “loan” in a savings account and pay the “loan” back with the “loan”). Then you get a credit boost, and your $1000 back. All you pay is the difference in interest earned vs. interest paid.
3. Then reapply for a home loan.
Your bills/rent don’t really show up on your credit unless you default. Most companies will only report in those cases and even then they have to be pretty extreme. I would go bank shopping and find a personal banker that you connect with and go from there. They should be able to answer your questions and get you set up on the road to home ownership.
Hope This Helps
Post # 11
Check your credit score, you can get a free credit report annually or you can pay to run the 3 scores online. For you I’d suggest a credit monitoring service like http://www.identityguard.com that charge a monthly fee (and usually has a one-month free trial that you can take advantage of as long as you cancel in time). That will give you the ability to monitor your credit reports & scores regularly – they also have tools to simulate what your score would be if you did certain things (like got a new credit card, applied for a loan, paid off debt, etc). I check mine regularly, and honestly I’ve never seen a utility bill or a lease show up on there at all so I don’t know if that will help you. I think the key is to have open, long-term, lines of credit (in the form of credit cards or loans) that are paid on-time and not max’d out.
I would start actively monitoring your score now. I’d also speak to several banks to find out what credit score they typically require before you apply. I’m not sure an FHA loan will be best for you, since it is intended for people who don’t have the 20% down payment, since you have a sizable down payment you should be able to get a traditional loan. Check with your credit union and bank first, also find out if your state has first-time buyer loan programs.
Applying for a mortgage is going to ding your credit, so you don’t want do it until you are fairly certain you’ll qualify.
Post # 12
@Gemstone: Correct- in September it will be a year. I think i’m going to talk to a family friend of ours that works at my bank & see what he suggests.
@abbie017: I don’t think your being a jerk at all haha no I haven’t ran my credit because I don’t want it to make my credit go down with them looking at it, and then the bank looking at it again, etc.
@dallasbride2012: We both have our own credit cards 🙂 That’s a good point that renting won’t show up on my credit unless there is a negative reason for it to, hm I hadn’t considered that. :/
Post # 13
Your story is really common! This is why I tell everyone to take out a credit card and use it wisely since you’re 18. That way by the time you’re out of college, you have a nice credit history for your first job (a lot of employers need good credit to hire you).
Post # 14
@Kkaattii: Checking your own credit will not affect your credit score, only applying for credit will.
Post # 15
@PinkMagnolia: I’m a big pusher for credit cards too, I got mine a few months after my 18th birthday -yes that means i’m only 19 right now, but I buy groceries on it, and then go home and pay it off haha
Post # 16
Find a loan officer that won’t just tell you no, one that will say ” No, but let’s talk about what you can do to qualify”. That is key, there is so much advice out there and really you need to have a specific plan tailor to your situation laid out for you. Do you have a banking relationship anywhere? If not ask around, see if any friends can recommend someone who they enjoyed working with. Banks don’t want to tell you no and send you on your merry way- they want to help you get in a position where they can give you the loan. Well some will and those are where you don’t want to be anyways.
So that’s my tip- Find a loan office to work with you on getting your situation where you need to be and don’t worry so much about re-applying. Getting your score up even a few points can mean thousands saved so ideally you want to not just squeak by on approval, but come through with flying colors. With 20% down and getting your credit better situated you could forgo an FHA loan entirely.
* This is not intended to be professional advice, always speak with your lender. Just wanted to get that out of the way 🙂 *