Do I Qualify For a Morgage?

[dangcredit]

Curious to see if we could qualify and how much Interest we could possibly get and/or how much our monthly payment would be. Currently paying 1070$ into a 2 bedroom apartment for rent which I had rather put towards a morgage.

1. Credit.  For Both Wife and I Low 600's (600-620) and climbing fast( Rebuilding credit) Husband- One CC 30 days late in 10/2013, 1 CA reporting since 01/2014, 1 Judgement reporting but paid off, judgement reporting since ~01/2010 . Nothing negative on wife's report but credit history is short-3 years.
2. Income.  85K Combined income
3. Source of income.  Employment, hourly,
4. Monthly debt payments.  Auto- $280, Personal Loan $125, Rent $1070
5. Employment W-2'd, Husband- 5years at current job, 10 years in the industry. Wife 2 jobs-6 months on one and 2 yearson the other, Vocational school for both.(Healthcare industry)
6. Assets/Reserves.  Savings-$2000, 401k- $1000, IRA-$3000.
7. Location. Southern California, San Diego.
8. Property.  single family house, Newer property.
9. Value.  200,000-350,000
10. Occupancy.  Primary residence
11. Transaction Type.  Is it a purchase, First Morgage.

[dangcredit]

Anyone? Is it that bad?

[ShanetheMortgageMan]

Your income looks fine for a $350k sales price.. but you will need more time since the late payment & new collection account.  An isolated delinquent mark is OK if you've had clean credit otherwise, but with the pattern of delinquent marks (judgment 2010, late payment 2013, collection 2014) an underwriter is going to want to see that you have maintained on time payments & have no new negatives for at least 12 months.  I'd suggest you try and pay-for-delete the collection account & see if you can write a goodwill letter to get the 10/2013 late payment removed... if you had neither of those you'd be good to qualify now.

Whereabouts in San Diego?   There are some down payment assistance programs down there that could help.  Although your income is on the high end for them, could be over depending on your family size. 

Another thing is your wife's job of 6 months couldn't be used to qualify since a second job or a part time job needs 2 years before it can be used to qualify... so just the income from her 2-year job could be used. 

Are you a veteran?  If so then VA will be your best option since it's 100% financing and the payment is the lowest out of all low/no down payment options.  But if not then FHA probably would be your best option, as the interest rates will still be good with your lower scores and it only requires 3.5% down ($12,250 on a $350k sales price).  USDA financing is an option for 100% financing... but you'd have to buy out near Ramona, Fallbrook, Valley Center or Alpine since it's for rural areas only.

If using FHA financing, then for a $200k sales price you could expect a total monthly payment of around $1,450... but for a $350k sales price it'd be more around $2,500/mo.

[dangcredit]

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@ShanetheMortgageMan wrote:

Your income looks fine for a $350k sales price.. but you will need more time since the late payment & new collection account.  An isolated delinquent mark is OK if you've had clean credit otherwise, but with the pattern of delinquent marks (judgment 2010, late payment 2013, collection 2014) an underwriter is going to want to see that you have maintained on time payments & have no new negatives for at least 12 months.  I'd suggest you try and pay-for-delete the collection account & see if you can write a goodwill letter to get the 10/2013 late payment removed... if you had neither of those you'd be good to qualify now.

The collection should come off- Alliance one already settled. Will write a goodwill for the 30day late on a CC. Am glad to know I would qualify now if I didnt have those negatives, thought our scores were too low for a decent interest rate.
Whereabouts in San Diego?   There are some down payment assistance programs down there that could help.  Although your income is on the high end for them, could be over depending on your family size. 

Another thing is your wife's job of 6 months couldn't be used to qualify since a second job or a part time job needs 2 years before it can be used to qualify... so just the income from her 2-year job could be used. This is something I was not aware off. Good to know.

Are you a veteran?  If so then VA will be your best option since it's 100% financing and the payment is the lowest out of all low/no down payment options.  But if not then FHA probably would be your best option, as the interest rates will still be good with your lower scores and it only requires 3.5% down ($12,250 on a $350k sales price).  USDA financing is an option for 100% financing... but you'd have to buy out near Ramona, Fallbrook, Valley Center or Alpine since it's for rural areas only.

 Not a VET , hoping for a FHA. Rural san diego areas are not too attractive to us so thinking of Miramesa areas

If using FHA financing, then for a $200k sales price you could expect a total monthly payment of around $1,450... but for a $350k sales price it'd be more around $2,500/mo.

Thank you so much for your input. Helps to get a picture of where we are at.

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[ShanetheMortgageMan]

You are welcome.  People are still seeing FHA rates in the low 4's with your credit score, so hopefully the GW letter will help fix that 30-day late and you'll be able to purchase by fall.

[dangcredit]

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@ShanetheMortgageMan wrote:

You are welcome.  People are still seeing FHA rates in the low 4's with your credit score, so hopefully the GW letter will help fix that 30-day late and you'll be able to purchase by fall.

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Probably not in the fall (my wife would go nuts just thinking of having a morgage right now).  We are shooting by end of 2015. Clean out the reports, get them stronger and higher scores. Dont want to feel like we are begging for a morgage when we go in. I hate that feeling, as everyone else rebuilding credit, when you go in and you feel like a second class citizen or not worthy of a loan. We want to slap the documents on the table and get offered coffee as we wait in the corner glass walled office of the morgage lender awaiting the best deal

[ShanetheMortgageMan]

End of 2015 shouldn't be a problem, that is like 1.5 years from now... plenty of time to clean things up.