Hello folks! I’m been thinking about getting a mortgage Lately. I was planning to start the process in spring of 2018. That would give me time However, my fiancé thinks we should start the process now. She thinks we should stop paying rent and get a mortgage. We pay $ 1800 in rent in the suburbs of DC. On one hand I agree, but I’ve had debt problems a couple years ago. Not anymore though. but I feel that it’s too recent and I need at least another year of clean history to not have issues with underwriters. So, I figure I’d ask what you folks think. Below is my profile.
Salary: $ 130k
Current savings: $ 15.7k
middle fico 4 score: 648
DTI (front end 9% back end 24%).
no collections. No current late payments. Last late payment was 9 months ago. Since January 2015 I’ve only had two late payments. However, I struggled bad between 2012 and 2014 and have a total of 12 late payments on various accounts in that two year period. I got it together in mid-2014 and paid off $ 34k of debt by the end of 2015. I still have a little credit card debt left ($ 3,332 to be exact). I don’t have high credit card limits so the $ 2k remaining balance leaves me with 44% utilization. I could use a little of that savings to pay down this credit card balance and still have $ 12k of savings leftover. This could possible help increase my score. But I can’t imagine it increasing more than 10-15 points.
I’m concerned that the underwriters will focus heavily on that 2012-2014 period with all those late payments across various accounts. So I feel like I need another year of clean history to help minimize that effect. At the same time I agree with my fiancé and I’m tired of paying someone else’s rent of $ 1800.
We know this DC area is quite expensive, but we don’t want a high mortgage. In fact we are looking at properties in the suburbs for $ 275k and less. There are so many foreclosures. We actually saw a nice property that we really like for $ 242k The mortgage on that would be less than our current rent of $ 1,800. We only plan to live in this place for 3-5 years.
oh I will be applying alone because my fiancé has crazy student loan debt and we are afraid we won’t get qualified at all, lol.
any chance of getting approval given the facts above?
Thank you in advance for reading and any advice provided.