Try for Early Exclusion?

[shipo]

Hey Gang,

As of yesterday I have entered into that final six month period before my Chapter 13 drops off my credit reports. I've seen a number of reports here and elsewhere which suggests TransUnion will entertain dropping the Public Record off of individual reports within the final six months, Equifax sometime in the last two to three months (reports vary), and Experian, well, don't bother asking; the answer is always "No!"

In my case it is more of a curiosity thing versus needing a bump in my scores; my wife and I aren't planning on buying a new home until next year, at the earliest, so applying for a mortgage will take place after, or even well after my bankruptcy drops off, and in spite of the fact I'm now driving a 15 year old car with ~175,000 miles on it; the car is in great shape and an absolute joy to drive, so I don't need a car either. That said, I am one curious cat to see what is going to happen to my scores when January 2022 rolls around; currently my FICO Mortgage 5, 4, 2 scores range from 720 to 739, my FICO 8 scores kind of lag in the upper 600s, and my FICO 9 scores are in the low to mid 700s. Since I don't need any new credit any time soon, clearly I don't need the score bump, but geez, the suspense is killing me, I'm like a kid waiting for Santa.

Long story short, do I poke the bear and ask for an Early Exclusion, or do I wait patiently?

[flashoflight]

I think it would be beneficial to find out early if your MMS 2/4/5 score is 740 or if you need to work on it prior to the 7 year waiting period for conventional. The 740 is key because that is when you get the best rates on conventional. If it is jumbo, you will want to shoot higher. Jumbo is out of my price range so I don't know what is the MMS that gets you the best rate for jumbo.

I'm so jealous you get to go conventional. I just refi'ed from conventional/HELOC to FHA and now am paying the dreaded PMI for the next five years.

[shipo]

flashoflight, my wife's MMS is already over 740 and it is a pretty good bet my TransUnion Mortgage 4 score will be over 740 as well. Why do I think that? Because that one is already 739. Given Experian and Equifax don't really do Early Exclusion too far ahead of the normal drop off date, I probably won't know what my MMS is until next January.

As for the mortgage type, our kids are already gone so we don't need a huge house; we're looking at houses which are single level 2-bedroom plus a den above a full basement in some 55+ communities, and can easily get in a new home for well under the Jumbo threshold. Since my discharge last year we've continued to live as if my Chapter 13 was still active (we've lived in "austerity" mode for over 8 years now), instead of paying the Trustee, I've been paying my savings account, so by this time next year there is a pretty good bet I'll have banked enough to make a 20% downstroke on the new home. Admittedly we've been lucky, my 15-year old car, purchased for cash during my bankruptcy, with 175,000 miles on the clock continues to look good and run flawlessly, my wife's car, which is all of five years old, was paid off nearly a year ago, and we have literally zero debt beyond the monthly credit cards which we pay in full before every due date.

Assuming things continue humming along for us, I'll be looking at doing a 15 year mortgage with the idea of paying it off before we retire in 2029 when we're 72.

[flashoflight]

shipo FHA refinance is very, very expensive inside of a 13 and still expensive outside of the 13. It turns out I had to do the 15 year to avoid giving extra to the 13. The monthly PMI is reduced by around half on the 15 year too. In hindsight, I can be aggressive in paying down the mortgage while on the high paying job before retiring and then switch to the 30 just before I quit the job in 6 years. That is almost the same time when I can switch to conventional. Hopefully I don't get hosed when I switch to the 30 conventional in 6 years with no more PMI.

I am totally with you on the single story house. I can still go up and down stairs easily for now, but those three story or even four story townhouses are bad when you are old. I can't imagine going up and down the stairs in a townhouse to do laundry. I would need to charge a delivery fee LOL. I'm glad my house is not a two story.

[shipo]

shipo FHA refinance is very, very expensive inside of a 13 and still expensive outside of the 13. It turns out I had to do the 15 year to avoid giving extra to the 13. The monthly PMI is reduced by around half on the 15 year too. In hindsight, I can be aggressive in paying down the mortgage while on the high paying job before retiring and then switch to the 30 just before I quit the job in 6 years. That is almost the same time when I can switch to conventional. Hopefully I don't get hosed when I switch to the 30 conventional in 6 years with no more PMI.

I am totally with you on the single story house. I can still go up and down stairs easily for now, but those three story or even four story townhouses are bad when you are old. I can't imagine going up and down the stairs in a townhouse to do laundry. I would need to charge a delivery fee LOL. I'm glad my house is not a two story.

Yeah, stairs aren't an issue for us yet, I mean heck, we are still running regularly and often see upwards of 1,000' of climbing on a single run, but sooner or later stairs may become a non-starter for us. That said, one of the cool things about the houses we've been looking at in the 1,600-2000 foot category is they have full basements below them (meaning another 1,600 to 2,000 feet of space). Given we live in hilly New Hampshire, virtually every house we've looked at has a "walk out basement" at the very least, some even have exterior walls and windows on two or three sides of the basement. Hmmm, can you say "Pool-Table"? Sure, I knew you could.

[justbroke]

I wrote in another area of BKForum about my personal experience. Rather than repeat that here, please see the thread at https://www.bkforum.com/forum/after-...credit-bureaus

Bottom line is this. Equifax: don't ask them! Experian: don't ask, but they'll automatically do this 3 months before the deletion date. Transunion: ask them and they will allow an early exclusion 6 months before the deletion date. Transunion can be done with a simple online dispute the first of the month.

Be careful, though. You will end up in a new bucket because you will no longer have a bankruptcy. This could potentially drop your score if you are a unicorn among the bankrupt.