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I have a question regarding qualifying for a 30 year fixed rate mortgage conventional loan, not FHA.
I recently was deeded a house that sold, and came into some money. I paid off all my debt except for the Student Loans of about 23K, and my Fico score which was under 660 has gone up to 688 (on MYFICO Equifax) although not everything is showing up yet as paid. I expect it would go to 700 once everything is updated.
I also own a home in California (I now live in North Carolina) which was modified in January of 2010 under the government program, its a 30 year fixed started at 2% and goes up eventually to 5%....that house was my primary residence when I got the loan modified, but shortly after that, I was offered a new job at a higher salary in NC. I was able to lease it out, and its been leased ever since.
I have one 30 day late showing in January of this year that was unintended. I had back surgery in October and was juggling bills, and paid the house payment on the 31st, (thinking it was still within the time period, but I obviously did understand 30 day latest are 30 days from the due date so 31 , was the first day they could report it. I had no idea...
Never the less I am writing because the lender I was speaking to about buying a home and putting 20 -25% down, I have 2 year tax returns on the rental house, and back end DTI is about 35%. But he said that because I have a Government Modification that its a HUGE red Flag and most lenders will not do another mortgage for me, and with the 30 day late on the mortgage from Jan 2013, I have to wait until at least February of next year.
Is this correct? I wanted to try to buy before rates go up too high. Or is it worth speaking to another lender. I just don't want to go through it, if I have to wait 6 months anyway.
thx!
LH
i dont think i have seen this scenario. we dont have a lot of loan mods here.
i would have to send ot to my underwriter.
basically, the lender could assume that you cannot afford to pay your bills if you are under a loan mod
i would insist that my LO send my file to underwriting for the pre-approval and not accept a desk approval from the LO.
some lenders can do this, some wont. just shop lenders.
shane may have seen this before.... he has more loan mods in his neck of the woods.
If you were trying to refinance your existing mortgage that was modified into a new Fannie Mae or Freddie Mac conventional loan, that wouldn't work, as neither refinance a mortgage that has been modified. However if it's another mortgage that was modified, and not the one you are paying off, then that is fine as long as you meet whatever specific lending periods the new lender requires after a loan modification has been completed. It could just be that it is completed & permanent, or that you need 2 years after the permanent loan mod, etc. Each lender can vary. However given that you've had a loan mod & then subsequently had a 30-day mortgage late (particularly within the past 12 months), I can see why a loan officer would be hesistant to tell you that you'll have no problem being pre-approved. Like Dallas said, it will definitely come down to underwriter's discretion on something like this, so I'd search for a loan officer who is willing to put your file together for an underwriter to review.