NBR: What can we do to increase the chances of getting approved for a mortgage?

pinkmist2010

DH has no credit history- what so ever. Not his fault though. He was never able to be approved for anything and we always wondered why... Well, we pulled his credit report and he has MULTIPLE multiple MULTIPLE bad checks that were written a year or so ago... His check book was stolen then and we have a police report revealing the checks that were already written as well as missing checks. We called the Safe Check company listed on the bill and they said if we faxed the police report that should take care of it. He also owes just a little under a $100 now from a hospital trip, and we are paying that off this week too.

I on the other hand, have always had really really good credit. But, due to an accident and hospital stay that pulled me out of work for 3 months, some things got behind and I am just now getting them all taken care of. Some went to collections bc the company didn't know how to reach me supposedly, but most of the collections agencies have said that they have not posted yet to my credit, so paying them off gets me covered. Other than that between the two of us we have a little debt in credit cards, which I usually pay over the minimum payments on, and I have a few student loans that aren't due yet as I am still in school. We also have a 2007 Chevy Aveo that is almost paid off, but is 188/mo right now.

 I was just wondering if I could get any advice from you all that already have homes as to what we could do, if anything, to increase our chances of being approved, or if with his lack of credit history it is more likely that we have to get a cosigner?  We are only trying to get a new home or town home in the 90Ks, so it is not a huge loan anyway.

LillyBug923

(I used to work at a bank in the mortgage loan dept)

One of the best ways to improve your credit score is to take out a credit card, BUT only spend about 10% of the total available credit and make sure to pay your bill on time every month. Only apply for one card, because every time your credit is pulled you lose 3 points on your total credit score. Mortgage loans are a little harder to get right now with the economy the way it is, but don't let that discourage you. Your car loan actually works in your favor, as long as you pay on time every month. Also, pay off your collections debts as soon as you can.

Then, go talk to a loan officer. Usually banks will give you better rates than mortgage companies on your mortgage loan. The loan officer can do a pre-approval so you know 1) If you can get approved and 2) how much you can get approved for. If you are not approved, the loan officer can then go over different options with you, such as having a co-signer.

Temp865949250007475

credit is SUPER tight right now, even for people with really good credit.  For SURE, you will have to have 20% down.  It might be worth looking into what government agencies can help you.  Are you a first time home buyer?  That might help too.

Your state should have info on their website that could help.

mooninlv

i'd talk with a loan officer in your area- every situation is different, and every area has different things going on right now. definitely a tough time to get a loan right now- even with great credit & money down (dh is in real estate). i'm sure you'll be ever to figure something out though- even if it means taking care of some things for awhile before you can buy. gl!