- Credit. What are your credit scores and if you have any, what negatives (collections, charge-offs, late payments, BK's, judgments, tax liens, back owed child support, etc.) are on are credit and if they are owing or not. When were the negatives, this is important, month/year is preferred, such as 3/07. For BK's the Ch, filing & discharge date. Even if credit isn't less than perfect, if you only have credit for a short period of time (<24 months), authorized user accounts (which aren't considered by underwriting), accounts from your father with the same exact name because you are a Jr., etc. that is important information to know too.
I'm just going off of scores shown by my credit cards:
TU: 750 Exp: 708 EQ: 698 Wife is in the 730 range across the board.
Negatives: 30 day late from BestBuy card 1/14 (card is paid in full with a $1,500 credit line)
30 day late from Wells Fargo 6/09 (card was paid in full and account closed 2/10)
- Income. Gross income is what is important when qualifying, not net income. For self-employed/1099'd people it's your gross income minus expenses/write-offs, adding back in depreciation/depletion. I know this is pretty sensitive for some people to list their income, but remember this board is anonymous (for those of you who want to remain that way). If you don't want to list your income, and just want to receive advice without addressing that part of qualifying (which is very major), just say you have enough income, no one will pass judgment, but realize the advice given might not be able to be complete.
My Income: $94,588 per year.
Wife's Income: $107,520 per year
Total: $202,108
Income has a few caveats. I will have worked at my current job for 2 years this coming July. At that point, they can count my bonus (~20% on top of what I listed for income). Wife doesn't start work until August (she's graduating and has an offer letter), and I factored low on her income. I suspect it will be closer to $130k per year.
- Source of income. Where is the income coming from? Employment, pension, social security, disability, foster care, VA benefits, rental income, lottery income, etc. If it's from employment, is it salary, hourly, overtime, bonus, commission, etc.
My income is salaried, and my wife's income is production based, but has a minimum hourly rate guaranteed. The number above is factoring just the minimum hourly rate.
- Monthly debt payments. This goes hand in hand with income and the new mortgage payment to determine your debt to income (DTI) ratio. Only items on credit is the general rule, but also items such as alimony, child support, union dues and some other work related expenses are included too. Only the minimum required payment amount is what underwriters are concerned with. Items such as utilities, cell phone, insurance, etc. are not included in the DTI. If you have a question if something is included just ask.
Monthly debt - $1,365. I only included minimum credit card payments, student loans, and car payments. Do I need to include anything else? (rent, DirecTV or Comcast)
- Employment (for those who are employed). What type of employment such as self-employed, S-corp, W-2'd, 1099'd, part-time, full time, 2nd job, etc. How long have you been on the job & how long have you been in the industry. A 2 year employment history is what most loan programs require. For those who have been self-employed less than 2 years, what did you do before your venture? For those of you who have less than 2 years employment history, did you graduate from a higher education school before you started working?
I've been employed for nearly 2 years at my present job. It will be over 2 years by the time we'll be closing, and I've been in the same industry for 10+ years. My wife (as mentioned above) won't start work until August, but according to our Credit Union, her being in school for the last 4 years counts.
- Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway). Savings, checking, 401k, IRA, stocks, bonds, CD's, mutual funds, money market accounts, gift, etc. all can qualify. If it is a pension or retirement account that does not permit you to withdraw or take a loan against (other than for hardship), and is only able to be used after you quit or retire, then it cannot be used as reserves.
$20k in the bank. Putting $15k down (to start the build process). About $20k in eligible 401k amounts (I'm counting 70% of the vested amounts)
- Location. What state & county. City or zip if you want but usually that is not needed. This is to determine FHA loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.
Douglas County, CO
- Property. Is it a single family house, condo, townhome, 2-4 units, 5+ units, manufactured home, a co-op, condotel, the penthouse of a 45 story apartment building, suburban, rural, a lot of acres, a working farm, a gas station, etc. Also the condition of the property is helpful, as lenders have certain minimum requirements properties must meet (working utilities, etc.).
Semi Custom Build from the dirt up. Single Family House
- Value. For a purchase transaction, what is the home price range you are looking in, narrowed it down to, or are under contract for... and for a refinance transaction what is the appraised value of the home and when did you purchase your home.
$600k-$650k
- Occupancy. Primary residence, vacation/2nd home, non-owner/rental property.
Primary Residence
- Transaction Type. Is it a purchase, refinance just for better terms, refinance to take cash out, looking for a 2nd mortgage, a reverse mortgage, etc.
Purchase
Additional Notes:
Hopefully this builder just needs a pre-qual letter to get the build process started. If so, we won't need to actually go through the full process (credit pulls, and verifications) until the house would be done (Sometime between Dec 2015 and Feb 2016). If that's the case, we will have more debt paid off, my salary will likely be higher, and credit scores will be higher as well. If not, we will need to go off the numbers listed above.
We are most likely going with a 100% loan from Navy Federal.
What are our chances?
