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Approval or Denial?

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dashingfordebtfree
New Member

Approval or Denial?

Hi, I've been lurking for sometime but I'm getting very serious about building a home and I need advice. 

 

My husband and I bought a manufactured home in 2003 and put it on my property with the understanding we would build later.  The home and property are owned free and clear.  The land is 0.65 acre.   The home we wish to build will run around $150,000.  It is through a very reputable builder and the homes normally appraise for more than their cost.

 

EDIT:  Definitely want to apply for a one-time closing, Construction to Permanent Loan.

 

Our combined income - $86,000 

 

DTI - 18%  (We have no housing payments at this time.)

 

My FICO scores - 716, 724, 732

His - We've looked over his free report but haven't purchased scores.  However, his utilization is lower than mine and he has very small balances.  His credit history is longer than mine with no "baddies" or collections, so one would think his scores are higher than mine.

 

Have talked informally with a broker about 10%, 3.5% payment and/or equity loans.  Property has a large garage/shop that we built in 2007.  Our county property valuation rose by $14,000 after this construction.  We want to sell our manufactured home and use that money toward down payment but realize that may have to count as more of a reserves/extras sum as we want to live in the manufactured home while the new construction is completed nearby.  We have some modest savings/cash reserves to put toward down payment and closing costs, but not the full 20%.  The builder has some awesome incentives for building soon, so if we could be approved, I'm ready to build.

 

Thoughts on approval, please.

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1 REPLY 1
bdhu2001
Valued Contributor

Re: Approval or Denial?


@dashingfordebtfree wrote:

Hi, I've been lurking for sometime but I'm getting very serious about building a home and I need advice. 

 

My husband and I bought a manufactured home in 2003 and put it on my property with the understanding we would build later.  The home and property are owned free and clear.  The land is 0.65 acre.   The home we wish to build will run around $150,000.  It is through a very reputable builder and the homes normally appraise for more than their cost.

 

EDIT:  Definitely want to apply for a one-time closing, Construction to Permanent Loan.

 

Our combined income - $86,000 

 

DTI - 18%  (We have no housing payments at this time.)

 

My FICO scores - 716, 724, 732

His - We've looked over his free report but haven't purchased scores.  However, his utilization is lower than mine and he has very small balances.  His credit history is longer than mine with no "baddies" or collections, so one would think his scores are higher than mine.

 

Have talked informally with a broker about 10%, 3.5% payment and/or equity loans.  Property has a large garage/shop that we built in 2007.  Our county property valuation rose by $14,000 after this construction.  We want to sell our manufactured home and use that money toward down payment but realize that may have to count as more of a reserves/extras sum as we want to live in the manufactured home while the new construction is completed nearby.  We have some modest savings/cash reserves to put toward down payment and closing costs, but not the full 20%.  The builder has some awesome incentives for building soon, so if we could be approved, I'm ready to build.

 

Thoughts on approval, please.


Someone who is more familiar with building homes will need to provide more specific information. Do you have 10%, 15% etc for down payment? Even though you don't have the 20% now, PMI can be stopped afer your payments bring  your equity up to 20%+  of loan value. 

 

Are the scores you listed your FICO Bankcard score or did a lender give you your FICO mortgage score.  If it's your bankcard score, the morgage has been proving to be 30-50 pts lower. Your score, if it's the FICO mortgage score, are good.  Go conventional instead of FHA so that you can get rid of the mortgagee insurance. 

 

When a couple buys a home, they go by the midscore of the person with the lowest scores.  Thus, I'd advise you to try to get two of your scores above 740 so that you can get the best interest rate. You didn't mention your utilization or card usage, but make sure all of your cards are at 25% of less of utiliation.  Try to pay them off with those remaining being 9% or less.

 

From experience on having work done on my home, you usually only pay up to 1/3 upfront.  Do some research, but I'm sure the payment outlay is similar for having a home built. 

 

Anyway I say go for it.

Original Mortgage maturity Sept 2044; Refi maturity Dec 2030
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Current Score: EX 849 EQ 835 TU 843
Goal Score: 850


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