Before I began my search for a home, I had to make sure I could qualify for a mortgage. I knew that I had credit challenges and I made every effort to try and pull my scores up enough to at least be considered for an FHA loan. I read that I could qualify if my credit score was at least 600. My income is fairly decent but I knew that score would make the difference. I had two main reasons for looking for a home; one - I was tired of renting and two - my student loans were coming due soon. In my mind, I figured for the money I was paying in rent (close to $1100 a month), I could own a home and still have some left for the student loan payment and my budget would be just about the same every month.
I contacted a realtor that I knew very well and she referred me to a broker. She (the broker) stated that her company had programs available that may help me get qualified. When I contacted her and explained what I was trying to do, she pulled a credit report that I agreed to. Unfortunately for me, she stated she couldn't help me and that my score was too low to even be considered for a mortgage. Not once did she say to me that she had any programs that would help me nor did she offer her assistance to me whatsoever. She blew me off like my needs were not important and she didn't have time.
Needless to say, this left me frustrated but I didn't give up. I knew someone was out there that could help me. I went to "Google" and started searching for lenders who helped people with low credit scores. That's how I found Total Home Lending. I looked up the website and started reading. I checked the interest rates; I used the calculator and then I did an online inquiry and a loan officer called me.
I explained to him what I was looking for. I told him I didn't have the best credit but I had fairly decent income. I had a daughter in college and my scores were low due to numerous student loans and some collection accounts that I could prove were paid, but were still on the report. My loans were not in default and I had filed bankruptcy almost 10 years prior.
He initially sent me a letter via email asking for specific items to qualify. I returned these items immediately. We talked on the phone several times a day and emailed each other as well. He was patient and answered all of my many questions. This process began late October 2013 and I closed on my home in January 2014. The timing was perfect because my lease was up February 2014.
When he pulled my credit report, my score was 615. FHA minimum guidelines were 640, with a minimum loan amount of $70,000 or higher at a 5% down payment. He explained what I needed to do to get those numbers up in 30 days by applying for another credit card (I had one already), use it and pay the balance down to $10 on both. This was just to get the pre-approval.
This loan officer walked me through this process - literally hand-held me. He asked that I write letters to the credit bureaus that were still showing balances or incorrect information on my credit report, and I responded immediately. My income was $77,000 per year and I knew I didn't qualify for any low-income or specialty programs, so my credit score was the only thing I had going for me. This gentleman was confident if we put all of the effort into increasing the score and explaining any glowing discrepancies, the underwriters would oblige accordingly. I had receipts, bank and credit card statements; gift letters from my parents. I had a portion of the down payment in my TSP account and I provided proof of that as well. It was clearly explained to me that if I received any monies unaccounted for, this would jeopardize all of the work we put into this process. I did not have anything like that coming to me so I was not concerned about that part. At some point, I was getting frustrated because some of the things they (FHA) wanted seemed very petty. My loan officer assured me that FHA was very strict about their guidelines and unwavering. I followed his instructions to the letter and I am very pleased with the outcome.
As tedious as this may appear, it was to my benefit to get all of the proper documents in order as required. I wanted a home. I could see the substantial savings in my living expenses if I had a home. The staff at Total Home Lending, along with my realtor was phenomenal in helping me achieve this goal. I highly recommend my loan officer to anyone interested in buying a home. read more
