I will appreciate any help anyone can offer. My family is getting closer to financial recovery after a failed business, but probably really a few years away from getting things back to a situation that will make me comfortable. The good news for us is, I think we are getting close to home ownership again. The stuff in blue is probably all you need to know, but I included all the info I can if it helps.
Thanks again for looking!
The Quick questions:
A short sale hits 3 years for the FHA on 6/21. Is the back to work program the only option to get a mortgage sooner? Something online was saying an extenuating circumstance might allow a “normal” FHA loan to go through now?
Google searches show some frustrated people who thought they were about to close on a new home only to have it fall through when they were about to close, but the posts look a couple years old. I have spent at least 15 hours trying to figure this stuff out on my own and I still don’t have any idea how any of this this would really work.
I am looking for “real world” answers of how the rules apply. I have read the program details a bunch of times, but still feel clueless.
1) Is a standard FHA loan with an "extenuating circumstance" an option now, or do I need to wait until the 3 year mark in June?
2) Given my timing and the fact I haven't taken a coarse yet, a “back to work” FHA loan is silly? , (I would need to wait 30 days after taking the class, then 30 more days to close? So that puts us close to the date in June anyway- If the answer is no to #1, just wanted to confirm I understand this option)
3) Looking at advertised FHA rates for awesome credit scores they look ½ a point lower than the average rates for conventional loans. I understand the crazy fees and never dying PMI added to a FHA loan, but I am looking to find out if the actual interest rates on FHA loans are typically lower than convential loans, or am I seeing teasers?
4) What’s a best practice to get the best possible rate without wasting mortgage brokers time, but getting my family a good deal from someone incented to give me less than the best deal? How do I know a deal is “good” and I can stop looking?
5) It looks to me like the 4 year mark from Chapter 7 is the limiting factor to get a conventional? I wasn't thinking my credit would make that an option anyway, but with this surprise, how much would I save by waiting? (Unless there is a way to get one sooner than October, it probably does not matter. My family is ready to settle down.)
Summary and Background:
I’m 90% sure I will be taking a relocation for a better opportunity within my company. I love what I do and really value stability and I think this new position would offer both. With a bonus I really like the people I would be working with. The deal is getting close to a final discussion and I am trying to figure out options, because decisions will need to be made this next week. If this blows up, I’ll probably have to make a company change…. Which would probably be better financially, but worse to me in every other way, so as long as everything goes like it has in the "prediscussions" I won't be doing anything to mess it up.
The final discussion and details are going to get finalized this next week, but I feel a little lost about available options and timing of buying a home.
I worked for other companies for a few years, then started my own business. The business ran on our personal credit and went bankrupt. We never had a negative credit event, and then tons at once (including chapter 7, a short sale on a home with 2 loans, and a bunch of credit cards.)
I went back into being an employee 3 years ago. We have rented for almost 4 years. I am hoping to get into our own home again, if it’s under reasonable terms. If possible, it would be great to avoid temporary housing. My recent credit history has no late payments, but I haven’t optimized things to raise credit scores like I probably should have.
The issue for FHA is I don’t hit 3 years from the short sale recording until 6/21/16. It looks like conventional might be an option 4 years after the Chapter 7 in October?
- Mortgage Credit Scores:
The Mortgage scores are a nice surprise: Equifax Score 5: 690, TransUnion Score 4: 719, Experian Score 2: 688
The standard Fico 8 scores are not so good: Equifax: 651, TransUnion: 626, Experion 660
- Credit Negatives:
Chapter 7 BK: Discharged 10/9/2012
Shortsale: Completed 6/21/2013 * Included in the BK and listed right away, but it took forever to get approvals.
There was a HELOC on the home.
credit cards with something like 3-6 no payments before the BK.
Now:
3 credit cards
2 authorized user cards on my wife’s accounts
1 corporate AMEX card I think I’m liable for, but I does not show up on my report
No late’s since the BK. I pay balances every month, but the limits are low and If reports are run at the wrong time I’m sure the utilization is too high. Also, The AMEX has up to $6k at any time, so I really hope it doesn’t hurt me.
- Gross Income and 4. Source of income. Debt Payments85k base salary for the last 2 years, 75k base salary 3 years ago. Same company the last 2 years and a different company in the same industry 3 years ago.
I also get Other small bonuses, commissions and company perks, but I’d like to get a home we would qualify for strictly on the base salary. I’m also hoping for a base salary raise with this move.
Other Assets: None really. A pathetically small and nearly nonexistent 401k, and 2 newer cars we worked like crazy to pay off the past couple of years.
My wife is a stay at home mom, so that’s it for income.
No other current debt.
THE REST: I understand the qualification percentages, taxes, etc… of the local area. We are moving to Texas (holy property taxes!) . Looking at good conditioned single family homes in the 260k range. This is already overkill for the questions I’m asking, so I’ll call this post good for now.
Thanks again for any help or expertise you are able to share!
