Wonderful update Brian23. homeownership here i come!

Thomas1, yes I have heard of the median credit score. My broker pulled all three on me and the middle one was the one that was just over the 580 (it was a 589). My broker said that either way I am still in the clear because FHA really doesnt go by credit scores, but more by your payment history in the last 2 years and of course your debt to income ratio. Heres a good way to tell if your pre-approved for an FHA without having to consult a broker.

- Clean payment history on all tradelines in the last 2 years (if not you are going to have to write a letter to the Underwriter explaining why you were delinquent).
- Your debt to income ration cannot be more than 25% on the front end (i.e. take a look at your last 2 paychecks and figure out your monthly gross income. Than look at everything on your credit report, see what all the minimum payments are an add them up. Divide your minimum payments on all your current accounts into your monthly income. As long as your not over 25%, than you've pretty much got the loan in the bag. Remember though this is only based on whats on your credit (i.e. car loan, student loans and credit cards), they dont take rent into consideration with this.

The good thing about all of it is I have 7 charge offs from 2003 - 2004 and I dont even have to worry about them because FHA doesnt even care about them as long as they are not in the last 2 years. And if its a medical condition charge off, they wont even think twice about it.

Meya, the only way a student loan doesnt count against your current debt is if its in deferrment (or your still attending school). I have 6000+ in student loans and they're not even playing a factor on my debt to income ratio.

Bottom line, I think now is the perfect time to for anyone to buy a home on an FHA loan (Meya, I think if you check it out you might be able to save a little money now since it really is a buyers market). I live in South Florida (well actually in the Metro Miami area) and this region was one of the hardest hit by foreclosures for the entire State. I have been looking at perfect 2/2 condos in my City and the crazy part is a year ago they were going for 150K plus and now I am finding them all for under 70K. Well, I found a 2/2.5 townhouse that would be a dream for me to get (1300 square feet, 2 floors and a 2 car garage). The list price was 64,900, I placed a bid for 55,000 (I figured I would shoot low), and today I received a counter offer from the bank for 58,900. I think I am going to accept there offer and close for that. The 2 best things are:

- I am trying to close with the FHA loan which will only require 3% down (or less than 2000 dollars). I am also getting seller concession, which means the bank is going to pick up the 6% closing cost for the sale since its a HUD approved home. So I am going to walk away with this house for nearly nothing and with a 6.75 fixed interest rate for 30 years.

- Best part is after all is said and done every month I will be paying 750 a month for the house (including the 250 a month HOA fee and the 2300 property taxes (yes believe it or not, thats what the taxes are here)). I currently rent a 1/1 apartment for 850 a month and I will be saving 100 a month and getting a bigger place with another bedroom.

Well, thats my current story and I recommend this to anyone since for me its a dream come true. Everyone please keep me in your prayers and keep your fingers crossed that all goes well with the closing of the house. I will let everyone know either way.

A few days after my best friend birthday, she was denied a home loan. Told me that the mortgage broker said 550 was ok. I told her that that was bad credit,...not very bad...but bad just as well. Her husband filed BK last year..have a new car and one credit building cc. As one of her birthday gifts..I paid for her first true Fico... It was 502. I asked her did she know this before apply for the loan. She said no...however the mortgage broker told her that most of her CC were maxed. After looking at her report..I told her that she could pay the collection items off , she had about 6 under $200. She has the reporting history...12 years...most of her cards she had for 8 years. One student loan , one personal loan, a car loan (paid). the other car loan (open). What surprised me was all of her cards were maxed two were over the limit ..and both Cap1's had 2 late pays. She went on vacation and I told her to pay both Cap1's before she goes and she could pay off three cards with that vacation money...she could work on her credit..but she has to be ready. I told her when she was ready..I'm help her.

Wow, this is some good info guys. I really appreciate this even though my time is not at hand for purchasing a home, but I do plan on doing so in a few years. I heard the part about paying off all of your debt and I also heard someone mention that they do not look at student loans (in good standing) to count against high utilization. Is this true? I will have a student loan when I apply for the home, I just wont have ANY Baddies on my report. I am not crossing my fingers on this because before I get stuck with debt and mess up again, I will take from something that means much to me to pay it.

My fingers are cross for you too

You may be able to get away with keeping the card. You already took the inquiry, so i probably wouldn't close it. If anything, it will help with your utilization ratio. I would pull my own Equifax, because i have heard they do a hard on Equifax from what i read, and i don't know how long it takes them to list the tradeline. That may be a question you may want to ask Kay's.

Now as far as the minimum fico of 580, mortgage lenders usually always take the middle score of all three, meaning averaging all scores together to meet the minumum of 580, but i would ask him/her to make sure.

That's what they have always done with me, taken the average middle FICO score.

Good luck, and i'll cross my fingers for you!!:

Ok, thank you everyone for the valuable information. I was the one who messed up in this. But, if I get the kay jewelers card and just dont activate it till after my closing, do you think it will show up on my credit report? Now, I am really worried about the closing, because I just put an offer on a house I want to get and they are supposed to have an accept or counter offer by tomorrow. Which means, if all goes well, I will be closing by the end of the month. I really cant have this baddy showing up on my report now. However, the mortgage broker never told me of this peice of information.

But on a side note, thats a great website that you provided YoYo. And just for the record, even though FHA doesnt currently have a FICO score requirement. My mortgage broker told me that all banks are looking for at least a 580 and no lates and baddy's in the last 24 months. If anyone out there is looking to buy a house, not only is now the time, but FHA is the way to go. Only 3% is required down and they will loan to the subprime world.

Just a little feedback from me....

Anyone planning on purchasing a home or refinancing a home should be aware of the credit process involved by the lending institutions. Some of you may know this, some may not:

Your rate is determined in part by your Fico score range. The higher the score, the lower the rate. There is a cutoff score depending on the credit grade that is determined by each bank.

Also, DO NOT credit shop at least 6 months before your application. Do NOT allow your credit picture to change for the worse during, middle, and just before closing. Pay off any high balances prior to applying, to allow ample time for the FICO score to increase, and it will. Also, NONE, absolutely no inquiries during the app process. Lenders WILL pull detailed bureau info at the app time, in the middle, and right before the day of closing. No new credit cards, no new cars, nothing!! Usually they will warn you of this, as i have been down this road twice. Try if anything, to get your scores as high as possible before applying, and DO NOT close any aged tradelines, (12) months or greater, it will hurt your score.Hope this bit of info helps. If i can answer any questions, email me:innocent:

Nice info, I was just telling Shark6 and Thomas1 to add a comment to this thread YoYo1. They were talking about how they pull during this process. I will not spoil the post, so I will wait until they come in with a comment.

Yoyo11, thanks for the information. We have a lot of first time home buyers programs where I live and I am going to add this to my arsenal of information.

rwmtd

For those who are looking for a new home loan with OK/Fair credit, check out.... www.fhahomeloans.com , Must have]
1. 2 years steady employment.
2. 2 years income s/b the same or increased.
3. CR should show less than (2) 30 day lates in last 2 years.
4. BK s/b more than 2 yrs old w/good credit since.
5. FC s/b 3 yrs old w/good credit since.

note]