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Do we qualify?

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woodsie1
Regular Contributor

Do we qualify?

okay so we are finally serious about purchasing a home. Please let me know if we stand a chance. We would like to buy a house around $250,000. We are first time homebuyers and are looking to do FHA. My state provides 5000 towards down payment, so I will use that. Plus we would be able to put down additional 4000 if necessary.

 

my info:

income: 51,000 employed for 3years

mortgage scores: 632 ex, 634EQ, 643 TU

cc utilization: 24% average age of accounts 4.5 years. Oldest tradeline is 9 yrs

student loans 52,000 all in deferment I should be able to get loans forgiven due to my job

monthly payments of all debt: $640 auto loan and cc payments

baddies:  paid judgment 1454 

                6 camera speeding tickets totaling to $1,000

                 4 30 day lates from paid off Santander Loan

 

his info:

income: 40,000 employed for 1.5 years but has worked in same field for 6 years

mortgage scores: 675, 696, 714

cc util: 20% average age of accounts 6 yrs

monthly payments of all debt: $675 (auto loan, personal loan, and cc)

baddies: 1 30 day cc late pay from 1 year ago

 

 

 

 

                

Starting scores TU: 537 EQ: 571 Current Scores 8/2015 TU:641 EQ: 641EX: 643
4000 3600 30006200 VS: 2450 NY&CO: 2320

Message 1 of 6
5 REPLIES 5
Anonymous
Not applicable

Re: Do we qualify?

Gonna need a bit more info. Is it an FHA, UDSA, VA, or conventional loan? How much do you plan on putting down?

 

http://ficoforums.myfico.com/t5/Mortgage-Loans/Do-I-qualify-for-a-mortgage-Info-that-is-needed/td-p/...

 

Usually info like this helps us help you better.

Message 2 of 6
woodsie1
Regular Contributor

Re: Do we qualify?

I edited to include a bit more info

Starting scores TU: 537 EQ: 571 Current Scores 8/2015 TU:641 EQ: 641EX: 643
4000 3600 30006200 VS: 2450 NY&CO: 2320

Message 3 of 6
Anonymous
Not applicable

Re: Do we qualify?

For FHA, the new rule for student loans in deferment is to use 2% of the outstanding balance or get a letter from the loan provider stating what your loan would be if it weren't in deferment. Assuming the 2% rule, you would be looking at $1040/month. That combined with your $640/month in debts and your husbands $675 puts you at $2355/month in debt not including the new mortgage. I am assuming a roughly 1% property tax , 4.125% interest rate, and the national average of  $800/year homeowners insurance and have roughly calculated, with the new mortgage of around $1600/month, your DTI would be 52%, which is under the FHA maximum allowable limit of 56.99%.  Every lender has their own risk tolerance so don't take this as fact as I am not a LO. In most cases, as long as the derogatory information is more than 24 months old, lenders are willing to work with someone in your situation as long as the rest of the credit profile is pretty good.  If possible, try to get that CC utilization under 10% (much easier said than done. I know). The finer points may vary depending on which state you reside in.  You can try and GW that judgment and have it vacated as it is paid.  Not sure how old it is, but the CRA's will do early exclusions if it is close to dropping off. My advice would be to get that utilization down if you can since it will boost your scores, increase the look of your credit profile, and lower your DTI all at the same time.  Try and get GW letters for the paid off baddies and PFD's for those camera speeding tickets if you can't get those tossed out outright as some states have deemed those tickets null and void due to constitutional issues with them that you'll have to google it for in depth analysis as it has something to do with 6th amendment rights and is a topic for another forum i suppose.  Sorry for the long post but I wanted to try to answer your question as best as I could.  Hope this clears this up a bit.

Message 4 of 6
woodsie1
Regular Contributor

Re: Do we qualify?


@kokenwa wrote:

For FHA, the new rule for student loans in deferment is to use 2% of the outstanding balance or get a letter from the loan provider stating what your loan would be if it weren't in deferment. Assuming the 2% rule, you would be looking at $1040/month. That combined with your $640/month in debts and your husbands $675 puts you at $2355/month in debt not including the new mortgage. I am assuming a roughly 1% property tax , 4.125% interest rate, and the national average of  $800/year homeowners insurance and have roughly calculated, with the new mortgage of around $1600/month, your DTI would be 52%, which is under the FHA maximum allowable limit of 56.99%.  Every lender has their own risk tolerance so don't take this as fact as I am not a LO. In most cases, as long as the derogatory information is more than 24 months old, lenders are willing to work with someone in your situation as long as the rest of the credit profile is pretty good.  If possible, try to get that CC utilization under 10% (much easier said than done. I know). The finer points may vary depending on which state you reside in.  You can try and GW that judgment and have it vacated as it is paid.  Not sure how old it is, but the CRA's will do early exclusions if it is close to dropping off. My advice would be to get that utilization down if you can since it will boost your scores, increase the look of your credit profile, and lower your DTI all at the same time.  Try and get GW letters for the paid off baddies and PFD's for those camera speeding tickets if you can't get those tossed out outright as some states have deemed those tickets null and void due to constitutional issues with them that you'll have to google it for in depth analysis as it has something to do with 6th amendment rights and is a topic for another forum i suppose.  Sorry for the long post but I wanted to try to answer your question as best as I could.  Hope this clears this up a bit.


Thanks Kokenwa. This is very helpful for us. I will definitely work on dropping our util. The good thing is that the tickets will drop off my CR as soon as it is paid. I tried to get the judgment vacated but the judge keeps saying that I can't get it vacated if it has been considered satisfied and he refuses to listen to the case. I really appreciate your help. Hopefully I can get everything paid off this month so I can qualify in the next couple of months. I really would like to move before the end of the year. Is this a realistic goal?

Starting scores TU: 537 EQ: 571 Current Scores 8/2015 TU:641 EQ: 641EX: 643
4000 3600 30006200 VS: 2450 NY&CO: 2320

Message 5 of 6
Anonymous
Not applicable

Re: Do we qualify?

I personally believe you can get it done this year.  I was just mentioning all of the other stuff so you can get the best interest rate possible.  No need to rush in and end up stuck with a bad rate if you can avoid it.  Lenders are looking for stability and sound financial decision making and you would want to present the best profile possible.  Think of it like a first date/first impression.  You wouldn't want to show someone all of the bad stuff about your past if you could avoid and you would want to look as awesome as you possibly could.  Once a lender sees the rough stuff in the credit history, there's no turning back unless you can get some of the stuff wiped off. Once you can get that util down under 10%, you should get a nice boost to your scores. I'm not sure when your credit card cuts its statement but hopefully you can pay before the end of the next cycle to get that boost. I don't think FHA has reserve requirements so you should be able to focus on the down payment and paying off debt.

Message 6 of 6
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