Just as i suspected the sins of the past came back to haunt my credit report. Even though it wasn't a surprise I still got that pit in my stomach when my lender, Pat McGinchey of Contour Mortgage ran my credit.
3 colleges, champagne taste & beer money, 2 years of living in Manhattan, 1 bad marriage that left me nearly bankrupt and with a voluntary repo I should be thankful my scores aren't below 400.
So now what? a conventional mortgage was going to be off the table. So it looks like I'll be doing an FHA loan by default (no pun intended).
We still needed to clean up my report a bit and enhance my score. Pat put me in touch with John DeSane of Credit Enhancement Pro to get this project started.
I highly recommend speaking with a professional to enhance your credit- it's a lot more complicated then just disputing mistakes. The first couple of days of the process, I called Pat almost hourly- I realized I am the most annoying buyer ever!
FHA VS. Conventional
With an FHA mortgage you can put down much less (3.5%) then a conventional loan. But you have to pay up front mortgage insurance and monthly mortgage insurance. While conventional mortgages require a credit score over 700- FHA can be more forgiving- they will go into the 500s but most lenders require a 640.
FHA rates are very good- I have clients locking in a 3.25% which is about the same as my conventional borrowers.
FHA offers other programs that are underutilized even in today's market. I love the FHA 203K-which allows the buyer to borrow money to repair the property (All work must be approved and done by a licensed & insured contractor).
For a more detailed overview of loan types contact Pat at Contour Mortgages directly at email@example.com
For more info on credit enhancement contact John at firstname.lastname@example.org
Well week 2 is down! I don't know if i'm more surprised that I'm sticking to this or the feedback I'm getting from clients as well as my peers! I hope to continue getting your support & feedback & even if I help one person out then this blog serves its purpose! Thank you everyone!