Posted on: 14th Dec, 2008 01:41 pm
I am a first time buyer looking to purchase next month.
Situation: wife has a fico 0f 740+, I have a 689. I have a student loan account in "special billing arrangement" which lists 120 days behind according to the trade line. In march it will revert to an account in good standing as a result of making 12 consecutive on time payments as per the "special billing" arrangement. Our debt to income is at 38%including the prospective home. We have very stable employment histories-accountant/teacher respectively. We'ed like to put a down payment of 5% on a $250,000 selling price. The moon and stars are aligned and we'ed love to get in on this interest rate/low house price situation as soon as possible.
We have a house in mind. Should we try now or wait until March?
Situation: wife has a fico 0f 740+, I have a 689. I have a student loan account in "special billing arrangement" which lists 120 days behind according to the trade line. In march it will revert to an account in good standing as a result of making 12 consecutive on time payments as per the "special billing" arrangement. Our debt to income is at 38%including the prospective home. We have very stable employment histories-accountant/teacher respectively. We'ed like to put a down payment of 5% on a $250,000 selling price. The moon and stars are aligned and we'ed love to get in on this interest rate/low house price situation as soon as possible.
We have a house in mind. Should we try now or wait until March?
Hi kflamchapman!
Welcome to forums!
Your credit score is 689 but you have a student loan which has been reported as 120 days late. If, according to the special billing arrangement, the student loan will come to a good stand, then it will also be reflected in your credit report. The lender will consider this as a positive mark in your credit report. Moreover you have said that both of you have stable employment. So I think you should wait and consider buying the property in March.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
Your credit score is 689 but you have a student loan which has been reported as 120 days late. If, according to the special billing arrangement, the student loan will come to a good stand, then it will also be reflected in your credit report. The lender will consider this as a positive mark in your credit report. Moreover you have said that both of you have stable employment. So I think you should wait and consider buying the property in March.
Feel free to ask if you have further queries.
Sussane
kflamchapman,
Just to throw in my 2 cents. A 689 score is not horrible, I have seen much much worse.
Despite the credit markets being in turmoil, based on the info you provided I think you could qualify. However, Sussane, is correct that by waiting until March, you will improve your loan terms, especially if your credit score jumps to over 700 or 720. With that said, if you think that loan rates and home prices in March will be similar to what they are now, then definitely wait. If on the other hand you feel that the window of opportunity may close before March, than you may want to do it now. No one has a crystal ball, but I don't see home prices jumping before March. Interest rates are a different animal and are very unpredictable, but we do know that the Fed is doing their best to keep them down and has openly admitted that they would like to drive them down to 4%.
Good luck.
chris
www.lenderpromo.com
Just to throw in my 2 cents. A 689 score is not horrible, I have seen much much worse.
Despite the credit markets being in turmoil, based on the info you provided I think you could qualify. However, Sussane, is correct that by waiting until March, you will improve your loan terms, especially if your credit score jumps to over 700 or 720. With that said, if you think that loan rates and home prices in March will be similar to what they are now, then definitely wait. If on the other hand you feel that the window of opportunity may close before March, than you may want to do it now. No one has a crystal ball, but I don't see home prices jumping before March. Interest rates are a different animal and are very unpredictable, but we do know that the Fed is doing their best to keep them down and has openly admitted that they would like to drive them down to 4%.
Good luck.
chris
www.lenderpromo.com
kflamchapman, the drawback to trying to obtain your mortgage now is that 120-day late being reported. lenders are generally going to want to see that your student loan is being reported as current before they would close on a loan for you. what that means: you can certainly go ahead and begin the application process now. be aware, though, that lenders have that attitude i noted, and that you may not be able to close until march, when the student loan is being reported as current.
i had a similar situation with one of my clients earlier this summer/fall. she was in default and went to collection, but worked with the collection agency to bring the account back to good graces and reinstatement. she couldn't close until the account was reported favorably, though.
one excellent aspect of her situation is that by keeping the lines of communication open with the agency and maintaining her promise to pay, they were willing to allow for a double payment in one month to advance the time required. this allowed her to close on her loan a little earlier than would have otherwise happened.
begin looking now for your lender and take steps to be pre-qualified. you'll have a better notion on how they'll treat the student loan situation, and a more likely favorable resolution on your desire to buy.
as chris pointed out, 689 is a fine score. it's not considered exceptional at all, but as first-time homebuyers, you ought to be able to slide into good rate scenario no matter what.
one last thing: check with your state's housing agency to see if there are programs aimed directly at first-time purchasers. rates are typically more favorable, as are the conditions for qualification, in many cases.
i had a similar situation with one of my clients earlier this summer/fall. she was in default and went to collection, but worked with the collection agency to bring the account back to good graces and reinstatement. she couldn't close until the account was reported favorably, though.
one excellent aspect of her situation is that by keeping the lines of communication open with the agency and maintaining her promise to pay, they were willing to allow for a double payment in one month to advance the time required. this allowed her to close on her loan a little earlier than would have otherwise happened.
begin looking now for your lender and take steps to be pre-qualified. you'll have a better notion on how they'll treat the student loan situation, and a more likely favorable resolution on your desire to buy.
as chris pointed out, 689 is a fine score. it's not considered exceptional at all, but as first-time homebuyers, you ought to be able to slide into good rate scenario no matter what.
one last thing: check with your state's housing agency to see if there are programs aimed directly at first-time purchasers. rates are typically more favorable, as are the conditions for qualification, in many cases.
What is the balance of your student loan?
The payment arrangements now, are they higher than the original payments?
The payment arrangements now, are they higher than the original payments?
Friday, I simply asked the university to allow me to use the new rehab guidelines on Perkins loans(9 months of consecutive on time payments[instead of 12] as long as you have made at least 1 of the required payments before July 1st 2008). They graciously complied-no haggling-and set up the new payments with the billing agency. In an instant they erased all negative information and brought the loan current! Merry Christmas! They will report the new information on the account at the end of this month. So now, for the hat trick.
I'd like to apply for a loan the week of January 5th-what is the fastest way to get the CBs to reflect this new information? Will a letter from the billing agency stating the updated nature of the account carry any weight with mortgage lenders?
Thanks...
I'd like to apply for a loan the week of January 5th-what is the fastest way to get the CBs to reflect this new information? Will a letter from the billing agency stating the updated nature of the account carry any weight with mortgage lenders?
Thanks...
sorry that's me above, I didn't understand the function of a quick reply! :shock:
Hi kflamchapman,
As far as I know, you will have to contact the credit bureaus and report to them about the new information. I think the letter from the billing agency stating the updated nature may help you in doing that.
As far as I know, you will have to contact the credit bureaus and report to them about the new information. I think the letter from the billing agency stating the updated nature may help you in doing that.
i'm pleased to see the good news...and Merry Christmas back to you, too.
as for the credit bureau information, creditors report to the bureaus on a varying schedule. if you are certain that the information will be reported this month (this week), then you can count on seeing the results pretty quickly, as well.
i always hesitate to suggest buying your credit report, but it might pay you to review it - maybe one of those companies has a trial period. in the meantime, continue to maintain excellent records of what has transpired so that you can update your lender as needed.
even if the situation is not updated with the credit repositories, your lender will take what you provide and obtain a credit supplement to satisfy itself. the supplement will have no benefit for you, other than it clearing up the report so the lender can be satisfied and, therefore, make the loan to you.
as for the credit bureau information, creditors report to the bureaus on a varying schedule. if you are certain that the information will be reported this month (this week), then you can count on seeing the results pretty quickly, as well.
i always hesitate to suggest buying your credit report, but it might pay you to review it - maybe one of those companies has a trial period. in the meantime, continue to maintain excellent records of what has transpired so that you can update your lender as needed.
even if the situation is not updated with the credit repositories, your lender will take what you provide and obtain a credit supplement to satisfy itself. the supplement will have no benefit for you, other than it clearing up the report so the lender can be satisfied and, therefore, make the loan to you.