Do I qualify now for a home loan ? Please respond.

[nettie]

Here is my situation.   I have been in a lease/purchase since 2007.  The home was brand new when I first began leasing.  The price was 120,000 for a 4 bedroom/ 2 bath home.  I live in the state of Alabama.  I', pretty sure the value of the house has went down soon . During the lease purchase we had 2 years to lease the house before taking ownership.  I went beyond two year because of my credit card debt of 13,000 and my installment debt  was about 14,000.  My fico score are EQ 709 and TU-739 4/10.  I have paid my CC debt down to 10,000 and my installment amount down to 4,000.  I was working with a loan officer and she advised me to concentrate on my installment debt because they were large payment amount.  My income is about 3,800 a month.  Presently, I have two credit card BOA 6,0000 -monthly payment of 115.00 and Discover card-4,000 monthly payment of 85.00.  I have 2 installments account - 2631 -payment of 171.00 and 1375- payment amount  50.00.  My loan officer will let me know if I qualify for a FHA loan next week.  She wanted to make sure all my updated payment was showing on my credit report.   Also do you think I will have time to get the 8,000 tax credit if I'm approve.   All input are welcome.

Nettie

[nettie]

I forgot to add that this is a primary residence and I have been employed at  my job for over 26 years and  I have saved S6,000 . I also have $38,000 in my retirement fund and my income is from salary.

Nettie

[ShanetheMortgageMan]

Couple questions - did the seller extend your option to buy beyond 2 years?  If the home is worth less than the $120,000 you originally agreed upon, will the seller sell it to you for what it's worth?

Even if it's still worth $120,000 and you still have the option to buy, things are looking good... your housing ratio would be about 22% and with the other debts your total debt ratio would be 33%... both are well within qualifying levels for FHA (31/43%).

[nettie]

Thanks Shane,

The Seller is still asking for 120,000 for the house. The area that I'm in, I think the house is still worth it.  I forgot to mention that the seller is putting up 5,000 at closing.

If I'm approve next week, do you think I will be able to close in time for the tax credit.  Also, the loan officer that I'm working with, her bank has sent me a pre-qualified

letter to buy a new home with no lender fees or orginator fees and no payment for 3 months.  The rate that being offered is 5.625 %.  Is this something that I should

acquire about or should I just pay lender fees and goes with a cheaper rate. My fico score are  EQ-709, TU-739.

[jbee]

Hi there,

I'm in Alabama also and looking for  a mortgage company.  Do you mind telling me who you're using?

Thanks

[nettie]

'm presently not with a mortgage company.  I'm working with a loan officer at one of the local bank here in town.

nettie

[jbee]

Thanks Nettie- Good luck!!

[ShanetheMortgageMan]

I'm not a tax advisor (nor do I play one on TV), so I can't say if your contract is eligible for the tax credit since you entered into it so long ago.  I do know that you have to close by end of June to get it, but you should really consult a CPA/tax advisor or the IRS (free) regarding that question.

Initially you said you believed the value of the home has gone done, but you then said you think the house is still worth it.  The appraisal will tell you if the home is still worth $120,000... however before you start shelling out money for a home inspection & appraisal, that should be something you should address with the seller so you know what the potential outcome will be.  If the home appraises for $115,000 (for example), and the seller will not budge on the $120,000 sales price... you can still buy it, but have to put the difference of $115k & $120k down, and then 3.5% down on the $115k value as well.

As far as the higher rate/less fees & cheaper rate/more fees... one will be less initial cash outlay, but will cost you more in the long run... the other will save you more money over the life of the loan, but will cost more initially.

[nettie]

Thanks Shane,

I will post what happen next as I communicate  with the seller.  You have been very helpful.

Nettie