Qualifications? Wife and i have a combined income of $226,000. We both have scores of 720 or higher, 0 debt. How do we stack up to lenders?

Asked by Brendan S., Boston, MA Thu Mar 8, 2012

Our incomes are almost split down the middle. So we are both good earners. We both own our cars outright. I don't have much in terms of credit, i have long good histories of car loans, but nothing much beyond that, as i pay cash for just about everything.

I do have two negatives on my credit report, 1 from an unpaid Nstar bill, and one from an unpaid speeding ticket in Vermont. Both went into collections because i moved. Both were paid long ago, without pay-to-delete stipulations unfortunately.

I'd really like to get my score up to 740 or higher which seems to be where i want to be. We'll be buying in January of 13. How do i get my score up before then? I've sent letters of goodwill to remove these negative accounts, since i have 9 months before buying, what are my options for getting my credit score above 720?

Should i even care to get it above 720? We have no debt and earn decently. Any advice is greatly appreciated!

Ps- If it matters we have our eyes on a 500k range...

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Richard Shap…, , Framingham, MA
Thu Mar 8, 2012
You will be fine and should be able to qualify for the best rate possible. I would suggest getting a pre-approval so that if your dream house pops up sooner, you can jump on it. We offer them with no cost or obligation. Good Luck in your home search.
1 vote
Louis Wolfs…, Agent, Needham, MA
Thu Mar 8, 2012
Your in the Obama 1% buy your home and enjoy it, for that matter buy a vacation one as well.

Quick rule of thumb income times 33% divide that number by the interest rate lets say .04 (4%) that means in your case you could qualify for a loan upto 1,800,000 I'm not saying you should buy beyond your comfort level but you could by more home if you chose. Also I assume you will be putting down a downpayment as banks are requiring that these days :)
0 votes
Jaime Fernan…, , 02472
Thu Mar 8, 2012
Hi Brendan,
Swell, I’ll just give you a couple of recommendations.
First, try not to incur in any big expense like buying furniture, a new car, etc., before you get your mortgage loan. That would mark a big jump in your credit history that raises a flag to lenders. Lenders like to see some debt in your credit history to gauge how good a payer (responsible) you are. So hopefully you have some past debt to show them you know how to handle your financials.
Second, start putting together all the documentation to backup your good credit history from the last two years at least. Income sources, paycheck stubs, income tax statements, bank statements, credit card statements, etc. etc. etc. Lots of paper work will be asked from lenders to confirm such a good scoring is true. They always request lots of stuff in all cases. That’s their way to get to know you.
Lastly, get the best possible advice on all the different kinds of loans you can get and how you would benefit most from each other. Aside from the fix/variable rates, there are a wide range of options that lenders can offer you depending of factors like how much savings money you have for down payment, etc. Not to forget closing costs, moving costs and the like.
In the end, nowadays we are going through one of the best times to buy a home. But you already know that, so go ahead and reap the benefits of your good judgment.
Luck on your home purchase,
Jaime Fernandez-de-Castro
0 votes
Bill Eckler, Agent, Venice, FL
Thu Mar 8, 2012

Simply stated, you should plan on qualifying for the best available rates. We would encourage you and other borrowers to shop around and seek out the best programs and opportunities because there will be variations. Getting a pre-approval will prepare you to be able to make a quick decision should the perfect property present itself.

Good luck,

0 votes
Heidi Zizza, Agent, Framingham, MA
Thu Mar 8, 2012
Sounds like you are fin a you are. Use a credit card each month even if only for $50 and pay it off immediately with each billing cycle. Good credit helps.
0 votes
Kenzo Tatsuno, Agent, Waltham, MA
Thu Mar 8, 2012
Congrats on your upcoming move. I would like the opportunity to earn your business here in Boston, and can provide references, and am here to answer any and all questions you have about the process. I also specialize in relocation. Regarding financing, I also have a background with money management and have personally managed over $400million for high net worth and institutional clients.

I believe that you are in good shape, but we'll have a better idea once we cross that bridge. I am very familiar with Boston, having graduated with BS in Business from Boston University and her suburbs.

I look forward to hearing from you.

Sincerely yours,

Coldwell Banker Residential Brokerage
Agent & Relocation Specialist
0 votes
CH Naamad, Agent, Boston, MA
Thu Mar 8, 2012
You are in good shape. You have nothing to worry about, except interest rates moving up in 2013.
Please let me know when you are ready, and I will get in touch with some brokers and bankers.
Meanwhile, please feel free to check our site for what the market is like today. Link below.
0 votes
Mark R. Barr…, , Bakersfield, CA
Thu Mar 8, 2012
From a lender standpoint you are perfect now. Make sure you get referals from local agents for local loan officers. I would get two quotes, one from direct lender and another from a broker. Where I am from the brokers close loans faster for less fees than the bankers and direct lenders and can do loans with no overlays, which you probably don't have to worry about. Some lenders require you have 3 active credit items on your report rated for 12 months but that is for the very strict lenders only.
0 votes
Kevin Vitali, Agent, Tewksbury, MA
Thu Mar 8, 2012
You should be in great shape. Talk to a local mortgage broker and get pre-approved. If your two negatives are old then they should not be effecting you that much.

A good mortgage broker can advise you on that.
0 votes
Brendan S., Home Buyer, Boston, MA
Thu Mar 8, 2012
Thank you to everyone! I will surely look to this great resource when ready to buy. We plan to start talking to brokers in 4-5 months from now. We will look into getting a pre-approval letter. Thanks!
0 votes
James Furlong, Agent, Brookline, MA
Thu Mar 8, 2012
You should be fine. You should be able to clear up the negatives in the time you have. A 720 score will get you some of the best rates available. Your monthly housing payment as a % of your monthly income is going to be well within the lending requirements. If you're going to put 20% down there will be no PMI. I don't think you are going to have any problems. Please feel free to contact me when you're ready to buy. We work in all the towns of Greater Boston and know the area well. We can also point you towards some good mortgage people. Good luck.
0 votes
Cliff Kenny, Agent, Boston, MA
Thu Mar 8, 2012
You have nothing to worry about.
0 votes
Ellen Friedm…, Agent, Cambridge, MA
Thu Mar 8, 2012
Hi Brendan -
If you write to me privately I will be glad to refer you to a reputable lender who will not only give you a very good rate but also help you bring up your score. It sounds like you are in good financial shape and have a great plan. Needless to say, I would also be happy to help you find your new home. Good luck to you.

Ellen G. Friedman, Keller Williams Realty, ellengfriedman@comcast.net
0 votes
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