Need 220K Mortgage ASAP..Pre-approval just expired.

theboomop · Joined: 12 Jul 2009 Posts: 3

Hi,
I'm new to the forums and the Mortgage world in general, but thanks for taking the time to look at my post. I had a pre-approval for a 212k mortgage for a short sale I'm bidding on. My preapproval just expired and I asked them to rerun the paperwork because I'm expecting an answer on the house in the next few weeks. I couldn't believe it when they said I no longer qualified because my mortgage scores have gone down to the 580 range. I was surprised because the only thing that has changed is I have paid off another 5k of debt plus the scores that I can pull all show 650!!!!!!. I'm in the military and make about 80k a year. The house should appraise for about 10-20k over the sale price. So I'm looking for a 220k loan, VA if possible or looking to use the 8k tax credit as a down. If anyone can help or has an idea on I can do this PLEASE let me know.

Thanks for your time

Mark

m2c · Joined: 03 Aug 2005 Posts: 937

580 is going to be a real major problem. The dramatic drop is curious. By chance was the account you paid off for $5K and old (originated a long time ago) account? That’s a very bad move FICO-wise unless you have other accounts with “age”.

If you have not already received a “score letter” you will get one soon. This will gives the scores from all three repositories AND, more importantly “reason codes”. That’s an old term when they actually indicated numbers and you needed your secret decoder ring to read them. Much easier now – each repository will list the first three or four major reasons why your score was not higher. Scores on this report are “mortgage model” but normally do not differ too much from those you obtain via the Internet.

Maybe there’s some hope in “rapid rescore” after you make some adjustments but 580 is going to be near impossible – lenders are weary of the new borrower attitude towards mortgage payments and few trust the government at this juncture.

Sorry I couldn’t be more optimistic.

m2c · Joined: 03 Aug 2005 Posts: 937

Ops forgot to mention the 8 grand is a TAX CREDIT, not cash. Valuable but you have to wait and/or adjust withholding to realize a small monthly benefit. Some state programs have second mortgage loan programs against the future credit but you're paying interest for instant gratification.

theboomop · Joined: 12 Jul 2009 Posts: 3

Thanks for the quick response. I don't know what happened. I have been working on getting my score up for awhile, I finally got the approval, I was around 630 when I that happened. So then out of the blue a collection for $95 showed up on my credit, it dropped my score down to 570 overnight. It wasn't mine and I disputed it and within 3 weeks my fico was back up to 630. I now have my score up to 650 which I get from one of those internet services but I don't understand how my mortgage scores could be almost 60 points less. The only thing I can think about is when that collections hit it lowered my mortgage scores and they never corrected back up. The mortgage company sent me the report they pulled but there is no mention of the collections. I also didn't notice anything crazy for the reasons. They said balance too high on some accounts but I have reduced most of those balances since my first approval!!! Any other ideas? Thanks again fr you advice

theboomop · Joined: 12 Jul 2009 Posts: 3

m2c,
I was just reading over your post again, can you explain that part about paying down old accounts, you mentioned that was bad, but yes they are older accounts.

Thanks

m2c · Joined: 03 Aug 2005 Posts: 937

Fair Isaac loves longevity. Consider this extreme example – you have three credit cards: one 10 years old and 2 opened in the last year. If you cancel the 10-year card, your FICO goes south real fast. Cancel one of the 1-year cards and virtually no effect. Yes, this quirk can "trap" you in an old card that has an annual fee.

KristinK908 · Joined: 29 Sep 2009 Posts: 26 Location: New Jersey

There are some very legit credit repair companies out there.
What state are you in?
some of them can increase score in less than a week.
Dont attempt to fix your credit yourself because closing paid accounts and paying on debts that stopped reporting can actually hurt your score.