I am looking to buy a home

you do not want to pay off all credit cards ,your fico will temporary drop pay them down to a balance of 20% call me I am very good with credit reports... linda 602-330-1598 and i can advise you what cards to pay down and which to pay off email is yourloanpartnerforlife@live.com

Pay off the cards but don't close them & use some of what's left for down payment. With a 640 score, you'll qualify for a Conventional loan but will be required to put at least 20% down with a score below 680. Call me to discuss specifics if you wish.Todd 563-324-9937

You need to meet with a local Mortgage Banker/Broker NOW. Only after reviewing how your credit looks can a Mortgage Professional give you a specific plan so that you will be loan ready when your money comes in and are ready to buy. The longer you wait the harder it will be to take corrective action. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950

If your previous sold home was not a short sale or foreclosure, you can apply now. FHA loan limits for Lake County IL is $410K, and requires 3.5% down payment.. There will be little interest rate difference with a 640 score to a 740 score, so if you have 3.5% for a down payment now, you won't have to wait.. Most FHA lenders require a 640 or above score to qualify.. The only thing I will caution you on is the credit card debt.. You said you closed all the accounts and agreed to settle with a 5 year payback plan.. I would be curious to see how that shows on the credit report.. If while you're paying on time, it just shows current, then that's good, and i would leave it alone, because once you actually pay off the credit cards, it's possible it will show "Settled for less" and that would be a negative mark that could lower your score even more.. As far as getting ready, you should contact a LOCAL mortgage broker now. Don't go to the local "Big" bank, and certainly don't use one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

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Since you walk away from house house 2.5 ago, you have to wait for 3 years to get an FHA loan. FICO of 640 is ok for a FHA. I have done FHA loans that the borrower will pay off credit cards during the purchase of the new home. I will recommend you to wait to pay off the credit card the during the purchase.

Adam, If your credit score is accurate at present, the only impact it would have at that point in time would be the interest rate thatyou would be receiving. You would be able to qualify for financing with that credit score right here and now. The other consideration wouldbe if there were any late pays, collections, etc. on your credit that would possibly affect the approval. One thing to keep in mind is that there is a difference in the credit score that you get when you pull your own credit vs. when I do, due to the difference in scoring modelsand what is used for consumer vs. lending. It would probably make sense to establish a relationship with a lender now, to see if thereare any additional issues that could pop up. Ray Hazucka

It seems to me that you will be able to get a mortgage, I would reccomend starting the process sooner rather than later. Any good loan officer should be able to advise you on how to maintain and improve your credit score. Whether or not to pay off some of the credit cards is a matter of qualification. If you will be able to qualify with out paying them off, then that is the best option. However, your monthly obligations may be too high to approve depending on your monthly payments. Contact a local lender and have them start working with you toward your future goal. Best of luck!