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Need advice for future home purchase..

My husband and I are planning on purchasing a home by June 2021. Currently his credit score is 611, but we are paying off 2 debts to raise his score. The only problem is he doesn't have any credit history besides utility, cable, and cell phone bills which have never been late. We also rent our home and have been since 2018. We've always been on time with our rent payments. My question is we rent from a private landlord and I pay her through Cash App but it still says her name and the amount paid on my bank statements. Would that be efficient enough to use as another form of credit history for us to be approved for either a FHA or conventional loan? We also have 10% for a downpayment. by katrinalacoste1523 from , . Aug 4th 2020 Reply


David R Youngs - Assistant Vice President (DavidRYoungs)
#64 ranked lender in Minnesota - 83 contributions

If your bank statements show the same amount coming out of the account consistently, then this could work. I have attached a copy of the guidance one bank gives as to what is required for verifying rental payments, to be used for "non-traditional credit" sources. I hope it makes sense, as I know it can be hard to read this in the format this website has, with no allowance to break the information into paragraphs. Feel free to contact me at dyoungs@progressivels.com if you have any further questions!Obtain a standard VOR (Verification of Rent), completed by the client's landlord.VOR's are not allowed if the landlord is a Family member of the clientIf a VOR is not available/allowed, obtain the client's lease agreement or documentation from the landlord confirming the rental payment amount and ONE of the following:Front and back copies of the most recent and consecutive 12 -24 months' cancelled rental payment checks as required per product. See the Maximum Lates topic for product specific requirements.The most recent and consecutive 12 -24 months' bank statements as required per product.Bank Statements must clearly identify rental payments in the transaction history.If rental payments cannot be clearly identified on bank statements, cancelled checks MUST be used.Clients paying rent in cash must show account statements with the exact amount of rent being withdrawn each month.A lease agreement is ONLY required if we are not able to obtain the VOR and should ONLY be used to verify the amount on the cancelled checks matches the amount on the lease agreement.

Aug 4th 2020
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 1,944 contributions

June of 2021 is both a long time in the future and right around the corner. If you begin right now, there is enough time to add 20-30 points OR MORE to his score by the first of the year and possibly an additional 20-30 by the time May rolls around. The first thing you should do is reach out to a bank, such as Capital One. Obtain a new M/C or VISA card. Do this NOW as the sooner you do this, the sooner your score is higher. The difference in interest rate on a mortgage with a 611 score and a 640 score is about a half percentage point in rate and up to two discount points. This means on $200,000 loan, you could be paying$50-$60 more per month and spending an additional $4,000 in closing costs with the weaker score. You have plenty of time to get your score up and qualify for the better rate and lower fees. If you are in one of the states, I'm licensed in, reach out and I can help you get where you want to be to get the best possible pricing. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ Licensed in Arizona, California, Georgia, Oregon, and Washington. Need help in other states? We've got you covered. NEXA Mortgage is licensed in 46 states ~ www.ApplyYes.com 480-889-9000.

Aug 4th 2020
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