FHA, Mortgage Advice

[Anonymous]

Hello all -

First post.  Thanks for all of the advice - it is helpful, but scaring me....

I just ran all 3 (Actual) FICO scores....TU650, EX 584, EXP 583

Is median score middle score (584), or average (606) - I guess it would make a huge difference?

I earn $130K+ Annually (2006 - $104K, 2007 $147K, 2008 Pace $143K)

I have $15K in credit card debt, about 50% Utilization

Stable employment history

My monthly minimums are $550

Car Payment $598

Total Other Debt is about $6K in school loans

Collections - 1 recent, paid in full - shows paid on all reports

No lates in 36 mos

Bankruptcy in 2002, discharged Jan 03

Rent - $3,830/month (Got to get out of NYC )

$5K in 401K

$7K in Investment Fund

$1K in Savings

Avg Balance $5K in Checking

Spouse works, earns similar money - however her situation is a bit more complicated (more recent BR - '04), currently unemployed, a few lates in past 24 months - but scores are 580ish on all 3, $52K in school loans, Monthly Credit pays $300, Car $524). 

We have been making it with her unemployed, but there leaves little room to save anything.

Take the following scenerio into consideration:

We have found a house that we want to make an offer on.
Pittsburgh, PA suburbs

5 Bed, 4 Bath $335K

3% Down Payment

Stable Market past 12 months - less then 10% drop

1.  Would it make sense to combine our application if she were to obtain a job in next week?

2.  What is the likelihood of being approved on FHA/Conventional/Any other loans?

3.  Can anyone suggest a broker/are a broker that specializes in these types of situations?

We really need to live somewhere that our rent is not the cost of a small mansion in other places, and buying in NYC is simply out of the question.  The house we want has been on market for 55 days, and I think we can get them to agree to a bit lower than asking.

Thank you in advance

YB

[DallasLoanGuy]

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yankeeboy wrote:

Hello all -

First post.  Thanks for all of the advice - it is helpful, but scaring me....

I just ran all 3 (Actual) FICO scores....TU650, EX 584, EXP 583 pretty decent for fha. can you pay down some cards and get over 620? it may help a little. certainly help with rate

Is median score middle score (584), or average (606) - I guess it would make a huge difference? 584 counts. / avg doesnt

I earn $130K+ Annually (2006 - $104K, 2007 $147K, 2008 Pace $143K) pace? are you commissioned? if so, we will use tax returns to see if you write off any unreimbursed business expense(lowering income)

I have $15K in credit card debt, about 50% Utilization

Stable employment history

My monthly minimums are $550

Car Payment $598

Total Other Debt is about $6K in school loans

Collections - 1 recent, paid in full - shows paid on all reports

No lates in 36 mos

Bankruptcy in 2002, discharged Jan 03

Rent - $3,830/month (Got to get out of NYC )

$5K in 401K

$7K in Investment Fund

$1K in Savings

Avg Balance $5K in Checking

Spouse works, earns similar money - however her situation is a bit more complicated (more recent BR - '04), currently unemployed, a few lates in past 24 months - but scores are 580ish on all 3, $52K in school loans, Monthly Credit pays $300, Car $524). you would  apply jointly.... and if it looks like she hurts.... the loan officer will remove her and run the file for approval again. spouse may help more than hurt though. if spouse gets a job in same field soon, the income may still be used.

We have been making it with her unemployed, but there leaves little room to save anything.

Take the following scenerio into consideration:

We have found a house that we want to make an offer on.
Pittsburgh, PA suburbs

5 Bed, 4 Bath $335K

3% Down Payment

Stable Market past 12 months - less then 10% drop

1.  Would it make sense to combine our application if she were to obtain a job in next week? yes

2.  What is the likelihood of being approved on FHA/Conventional/Any other loans? decent chance fha

3.  Can anyone suggest a broker/are a broker that specializes in these types of situations?

We really need to live somewhere that our rent is not the cost of a small mansion in other places, and buying in NYC is simply out of the question.  The house we want has been on market for 55 days, and I think we can get them to agree to a bit lower than asking.

Thank you in advance

YB

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Overall.... I think you will be fine.

Obviously,  I would have to see a full file before I said.... "slam dunk".

But this is a profile that gets approved every day

[ShanetheMortgageMan]

They go by the middle/median score, so that'd be your 584.  It could make a difference as a 606 middle credit score usually is indicative of better overall credit than a 584.

Pittsburgh areas FHA loan amount limit is at $327,500 so you'd just fit within it if you get it for $335k or less considering 3% down.

With your income you should be fine to qualify debt to income ratio wise for an FHA mortgage.  However recent collection might be preventing you from getting qualified.  What was the collection from and how recent was it?

If you can't qualify on your own then adding your wife to the loan application to help qualify could work out if she gets re-employed and if the gap is longer than 30 days she can give a good reason why.  The reason she would help is that your debt ratio gets really low then, and is a compensating factor for the not-so-perfect credit.  Reserves after you need to bring in funds to close (your down payment + closing costs, or if the seller agrees to pay for everything then you wouldn't need to bring in anything) are also another compensating factor.

It's against the terms of service to recommend a specific broker unfortunately.

If you can't qualify then one suggestion is to pay down some credit card debt with your savings so your utilization decreases and your credit scores increases, then re-apply again.

[Anonymous]

Thanks for your advice.

What are your thoughts on the Nehemiah program/Ameridream?

[Anonymous]

They go by the middle/median score, so that'd be your 584.  It could make a difference as a 606 middle credit score usually is indicative of better overall credit than a 584.  OK, this makes sense now

Pittsburgh areas FHA loan amount limit is at $327,500 so you'd just fit within it if you get it for $335k or less considering 3% down. This I was aware of.  The seller paid $347K in Feb 08, but is moving back to California because of weather in Pitt. 

With your income you should be fine to qualify debt to income ratio wise for an FHA mortgage.  However recent collection might be preventing you from getting qualified.  What was the collection from and how recent was it? I moved from Baltimore and had one last electric bill I was unaware of.  I paid it in full as soon as I received notice.

If you can't qualify on your own then adding your wife to the loan application to help qualify could work out if she gets re-employed and if the gap is longer than 30 days (Gap of unemployment, or employment?) she can give a good reason why.  The reason she would help is that your debt ratio gets really low (even with her $50K+ in school loans?) then, and is a compensating factor for the not-so-perfect credit.  Reserves after you need to bring in funds to close (your down payment + closing costs, or if the seller agrees to pay for everything then you wouldn't need to bring in anything) are also another compensating factor. 

It's against the terms of service to recommend a specific broker unfortunately. (OK)

If you can't qualify then one suggestion is to pay down some credit card debt with your savings so your utilization decreases and your credit scores increases, then re-apply again

[DallasLoanGuy]

rolls in the down payment.... so you basically finance it.

fee is nominal.

program may not be allowed in the future.

i use them all of the time.

[ShanetheMortgageMan]

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yankeeboy wrote:

With your income you should be fine to qualify debt to income ratio wise for an FHA mortgage.  However recent collection might be preventing you from getting qualified.  What was the collection from and how recent was it? I moved from Baltimore and had one last electric bill I was unaware of.  I paid it in full as soon as I received notice.  Can you go back and ask them to delete out of goodwill?  Never hurts to ask.

If you can't qualify on your own then adding your wife to the loan application to help qualify could work out if she gets re-employed and if the gap is longer than 30 days (Gap of unemployment, or employment?) Gap of unemployment she can give a good reason why.  The reason she would help is that your debt ratio gets really low (even with her $50K+ in school loans?) Assuming her payment isn't more than $500-600/mo then yes then, and is a compensating factor for the not-so-perfect credit.  Reserves after you need to bring in funds to close (your down payment + closing costs, or if the seller agrees to pay for everything then you wouldn't need to bring in anything) are also another compensating factor. 

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[Anonymous]

OK, all great advice. Thank you both so much. If anyone else has any similar stories that turned out successful/unsuccessful, please post. Thanks!

[ShanetheMortgageMan]

You are welcome.