Been a long road and rough year, and I haven't posted in a long time. Went through a divorce in August, prequalified and made an offer on a house in September, had surgery November 11. I am closing Monday. I asked several times about a section 184 home loan and what the requirements were. No one could really confirm anything so I wanted to share.
Some details about my credit: I have 1 medical collection for $22.50 from 2011 that I had already paid they refused to do a pay for removal but Section 184 requires that any collections be paid prior to lending so I paid this last year the underwriter never even asked about it. I have 5 credit cards, 4 with zero balance, 1 with a 45% Debt to Usage ration and the underwriter never asked about this either. A credit card inquiry for a work credit card for travel expenses through my company but AE pulled my credit anyway ( I just had to explain what I just typed here). A car loan in December 2015. Basically the only explanation I had to give to the underwriter ever was that my 2014 and 2015 income tax balances were paid with proof that I provided by logging into the IRS website and downloading a transcript (they did not require requesting them on their own), the American Express INQ, the fact that my divorce papers said I was going back to my maiden name but I still carry my ex's last name legally, and my short term disability information. All in all it has been a pretty easy and smooth transaction.
Interest Rate of 3.75%
Mortgage fico scores: Transunion- 776/ Equifax-705/ Experian-704
Home list price $194,000
Purchase Price $190,000
Appraisal Value $235,000 (forclosure on market for 88 days)
Down Payment 2.25% $4275.00 (this can be gifted)
Section 184 allows the seller (in this case the bank) to pay 6% of purchase price toward closing I requested and they agreed: Allowed $11,400 but actually was 8944.29
The difference in the allowed $11,400 and actual of $8944.29 was paid toward the purchase price of home $2455.71
One time loan guarantee fee of 1.5% rolled into the loan (a requirement of a Section 184 home loan) $2639.25
The Section 184 PMI is only .15%
Hazard Insurance p/yr: $2068.48
Property Taxes: p/yr: $1627.08
Estimated Payment Breakdown years 1-10: $1204.01
principal: $873.02
PMI: $23.02 (WOW that is low!)
Estimated Escrow for Taxes and Insurance $307.97
Years 11-30 the PMI will be gone
