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New Member
clarkt1
Posts: 8
Registered: ‎08-18-2010

Re: Evaluating Conventional vs. FHA (VA & USDA)

Can you refi a conventional loan with an VA one? I have not used my benefit because both of the past homes we financed were under my wife's name who had better credit than I. That has now changed and we are equals - if that's possible.

Starting score TU 612 Current 691 Goal 750
Starting score EQ 617 Current 730 Goal 750
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New Member
mobias76
Posts: 2
Registered: ‎10-23-2010

Re: Evaluating Conventional vs. FHA

I would just like to add, for my first home attempt with a VA loan, it is in NO way shape or form any easier, or more lenient to be approved. In our current paranoid lender market, we are going through the gauntlet of meeting condition after condition, having to pay off almost everything on our credit,  because of manual underwriting. The problem seems to be, the VA's own 'guide to lenders' handbook that specifies what should and shouldn't be a factor in determining approval, are not backed by any federal law or upholding to force upon lenders. Therefore, things that are blatantly supposed to be a non-factor, are being forced upon us to justify and resolve. It is still a lender/investors market, and up to THEIR standards. As far as I'm concerned, the feds need to beef up their authority over this programs issuance or it will be rendered pointless.

 

Kindof a shame that a federal program specifically set up to help us veterans get into our first home, has been completely under minded by the banks. The only benefit I will see is the ability to have no money down, and not to have to pay mortgage insurance. Other than that...good luck standing in line at your local mortgage broker.

 

Super Contributor
ShanetheMortgageMan
Posts: 7,835
Registered: ‎09-28-2007

Re: Evaluating Conventional vs. FHA (VA & USDA)

[ Edited ]

Dr-Acme, correct, conventional would likely be the best loan for that situation.

 

clarkt1, yes you can refinance from conventional into VA.  It requires a full qualifying refinance though, with an appraisal, income/debt evaluation, etc.  It is not the same as the VA IRRRL refinance where income, credit or appraisal isn't required.

Established Member
socalgenie
Posts: 30
Registered: ‎06-27-2009

Re: Evaluating Conventional vs. FHA (VA & USDA)

Such a helpful thread! Thank you for the great info! But of course it's led me to a question. :smileyhappy: My husband and I always figured that our only choice was an FHA loan since we're not planning on a down payment of more than 5% (ish). But having read this thread my understanding is that we may be able to get a conventional loan because of our high credit scores? Both of our EQ and TU FICO's are in the 785-802 range. How do conventional loans fare as far as allowable dti goes? We don't have any debt other than student loans for a combined payment of $340 per month but because our income is fairly low (on paper) we will need the dti allowance to be high to be able to afford in our area (Los Angeles).

 

Any help is appreciated!

Super Contributor
ShanetheMortgageMan
Posts: 7,835
Registered: ‎09-28-2007

Re: Evaluating Conventional vs. FHA (VA & USDA)

Welcome.  When putting less than 20% down and using conventional financing, at least here in California, you'll need to have private mortgage insurance (PMI) on the mortgage (in other states where values have fared better, some lenders offer 2nd mortgages to 85-95% CLTV so you can avoid paying PMI), and PMI requires no more than a 45% debt to income ratio.

New Member
hj2222
Posts: 3
Registered: ‎02-23-2011

Re: Evaluating Conventional vs. FHA (VA & USDA)

Hi there..

 

Will a VA loan be processed if a BK was in 2010? We found that our scores are in 620-640 ranges and would like to see if we can use his VA eligibility, but can't find any info on the length of time that has to pass before a mortgage can be approved.

 

Thanks for any help!


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New Member
hj2222
Posts: 3
Registered: ‎02-23-2011

Re: Evaluating Conventional vs. FHA (VA & USDA)

[ Edited ]

Sorry.. forgot to select "Email me when someone replies "


Starting Scores: EQ 621 EXP 622 TU 669
Current Scores: Just started!
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New Visitor
wcadj1220
Posts: 1
Registered: ‎03-05-2011

Re: Evaluating Conventional vs. FHA (VA & USDA)

Thanks Mortgage man.  But what about USDA. The County I live in is approved for USDA loans.  Why are they different from FHA and Conventional?

Super Contributor
ShanetheMortgageMan
Posts: 7,835
Registered: ‎09-28-2007

Re: Evaluating Conventional vs. FHA (VA & USDA)

 


hj2222 wrote:

Hi there..

 

Will a VA loan be processed if a BK was in 2010? We found that our scores are in 620-640 ranges and would like to see if we can use his VA eligibility, but can't find any info on the length of time that has to pass before a mortgage can be approved.

 

Thanks for any help!


It depends on the type of BK, and the reasons behind needing to file BK.  If it's a Ch 7, then 2 years is required unless the BK was due to extenuating circumstances, then just 1 year from the BK can be acceptable as long as there is also 12 months of re-esblished credit.  With a Ch 13 BK, you only need to be 1 year from the filing date with all trustee payments made on time... so technically you can be in a Ch 13 BK and get a VA (or FHA) mortgage, as long as the trustee & judge approve it.  If a Ch 13 BK has been repaid/discharged, then that person is eligible immediately afterwards.

 

Super Contributor
ShanetheMortgageMan
Posts: 7,835
Registered: ‎09-28-2007

Re: Evaluating Conventional vs. FHA (VA & USDA)

 


wcadj1220 wrote:

Thanks Mortgage man.  But what about USDA. The County I live in is approved for USDA loans.  Why are they different from FHA and Conventional?


 

Not sure if you saw, but there was a part that talked about USDA as well.  The direct link is USDA & VA differences.

 

To add to the USDA section, effective in October 2011 there will start being a monthly fee amount on the Guaranteed version (Direct will remain no monthly fee).  The amount is .3% per year, or on a $100k loan it translates to roughly $25/mo.


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