07-12-2009 08:20 PM
07-12-2009 10:53 PM
As you suspected, getting approved for a home loan is more than just a credit score.
Yes, the credit score is an important part of the decision making process but it is not the only part.
In addition, the Loan Officer and Underwriters will be looking at your Debt to Income Ratio (DTI) and will need to make sure they feel comfortable you have enough money not already tied up for repaying other debts. They'll look at payment history (many will not approve loans in which you have had missed payments in the last 12 months), most likely also verify your current living arrangements checking with the landlord if you've paid on time, etc.
6 weeks is a very short amount of time. In addition to actually dealing with the loan itself, you still need to find a house, negociate a price, deal with the other issues such as appraisals, inspections, etc. I might check with your landlord to see if you could move to a month-to-month agreement. It may cost a little more, but it will remove the immediate crunch from you. You don't want to make a mistake you'll later regret buying a house that is not right for you just because you had to have it done in a certain time frame.
There is a board here on the site dedicated to discussions of home loans. The folks there are much better experts than I am. But hopefully that will give you a little food for thought.
07-13-2009 07:29 AM
Yes, scores is only 1/2 the battle. I've bought and sold 3 homes over the past 7-10 years. Other things to consider is do you have any recent negative marks on your credit? And by recent I mean in the past 12 months? If so, it will be tough. Those older than 12 months will likely require a letter of explanation.
Have you been saving for a down payment? I suspect you will have to put a minimum of 3% down, plus some closing costs if you can't negotiate the seller into paying them. There are some 100% loans out there that avoid the down payment but I believe you require higher credit scores. Besides it seems you would want to put a little down so you have at least some equity when you move in, especially in today's economy.
The ratios mentioned by the other poster are 29/41, meaning your house payment can be a MAXIMUM of 29% of your GROSS income and the amount of all REPORTED debt (including the new house) can only be a MAXIMUM of 41% of your income. Do you fit into these guidelines? Sometimes if you are within a percentage or two, they will flex. More info here: http://www.fha.com/debt_to_income_ratios.cfm
I agree, 6 weeks is a very short time frame to get approved, find a home and GET CLOSED! Usually it takes 30 days or so just to close after all negotiations are final. It's not impossible, just unlikely. I'd say more like 2-3 months total, and I would agree looking into a month-to-month lease is a good idea. Most apartments are more than willing to work with you if they are advised you are house hunting. Expect to pay $50-$200 extra per month, depending on your location for this month-to-month option.
07-14-2009 09:36 PM
Is your credit clean for the last 12 months? No late pays? Do you have the income and steady employment?
I say give it a shot! All they can do is say no and then tell/show you where to improve.
We are finally homeowners!!
Closed May 5th-30 yr fixed at 5.25%.
07-16-2009 04:45 AM
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