First Time Home Buyer FHA

[Anonymous]

Hey guys, I am new at this, so hang in there with me. My husband and I are currently in the process of buying our first home. We were pre-approved by our lender last week and we now have a home under contract that we are supposed to close on in May. My middle score is 667 and my husband's is 790. I have had accounts in collections, but all of them are paid and the last one was paid in May 2016 and the one before that was 2014. So I have no negatives on my report currently and all of my credit cards have 0 balances and are current. My car note and another loan i have is current and i have never been late. I refinanced my car last year to get a better interest rate. His credit history is pristine. I am nervous about the underwriting part as this is our first home and I have heard the horror stories. We have more than enough money saved for closing and downpayment, our DTI ratio is not high, just below 31% for me, not sure for him at this time, but I have unreimbursed employee expenses on my taxes that is $3500 for 2015 and $1250 for 2016. I know they take that away from your gross income. Although it isn't alot, should i be worried? We were pre approved for $220k, but the house we have under contract was settled at $197k. My husband's taxes is as simple as it can get with no extra's, except he took care of his nephew last year and had him as a dependent. We have no overdrafts on our bank statements, no deposits that we don't have a valid explantion for, steady employment at the same job for 6 years for me and 12 years for him. I worked on my credit for about 3 years to get everything paid for so that it could increase. I have been late on a car i once had and a loan, but all of that was back in 2014 and is now paid for. Should i be worried? Any advice is appreciated.

[Anonymous]

I think you can be pretty confident you have nothing to worry about as far as getting the loan through underwriting. Dont suppose you guys can support the value of the house with just his income? With his score you would be able to get best rates out there. Has the appraisal been finished? That's really the only hurdle you may have left, you can relax you've got this.

[Anonymous]

We have been locked in at a 3.8 interest rate with us both. I've been doing so much researching until it's driving me insane. Since home is contingent upon inspection, our LO is waiting for that to come back before officially getting started I think, so no appraisal yet. I was mainly worried about the accounts I had in collections years ago that has been paid out since 2014 I think and another loan I had in collections that I paid out in May of last year. I cannot wait until this is over!

[ShanetheMortgageMan]

If you credit has been clean for the past 12 months (meaning no new collections, late payments, charge-offs, etc.) then you should be good on that part.  The amount of your unreimbursed employee expenses are minmial, so if you were able to get pre-approved for $220k and those were factored in, then a $197k sales price should be fine when factoring them in.

[Anonymous]

Yea. It has been clean for that long or longer. Our LO didn't ask for our taxes during pre approval, just W2s, stubs, and bank statements. That's why I was concerned.

[ShanetheMortgageMan]

I'd ask your loan officer if they will need your tax returns.  FHA technically doesn't require them, but a lot of lenders ask for them anyway.