How Do I Get This Done

[bigman023]

We recently moved due to DW job change..At the time we wern't ready to buy, so the nice lady at the bank put us in contact with a builder who would rent to own.  Its been a year, and we will soon be ready to purchase.  My last inquiry falls off 10/10/2010, and then we will apply.

We plan on going USDA.  What I wanted to know is, will this purchase be any different than buying a home we were not currently renting....For example, at the start of lease we placed $1500 to go towards the purchase price.  Can this be used in lieu of earnest money, or will banks want to see earnest in escrow or something.  Also, because we already know the house we want, I really see no need to use a realtor.  But I was wondering how do I put a contract on the house without a realtor. I was even wondering if it would be wise to see if a realtor would work with me on a reduced commision.

So I guess for starters I need to know will I be required to come up with more earnest, or will the $1500 paid @ start of lease suffice?  I assume I can go out and obtain a standard real estate contract, but would this be frowned upon when it goes to underwriting?  Also, can the services of a realtor serve any purpose in this kind of transaction?

Our file will not be one of the strongest files. So, Im just wondering what the best way to approach this transaction, to give us the best chances of getting approved.  Any tips would be appreciated, especially from the real estate insiders we have on the board.

Thanks

[Anonymous]

Earnest money is not a banking condition, it is solely an agreement between a buyer and seller.   I have approved loans with $100 in earnest money and ones with $100k.  It does not matter. 

Odds are that, if your original lease-to-own was drafted correctly, you already have your purchase agreement.  There may be some sort of condition to document the earnest money from a year ago, but that's really a small detail in the whole picture.  

I don't understand why you are waiting for the inquiry to drop off.   Are the scores the concern?

A loan is nothing more than FICO, loan-to-value (USDA being an exception), income, and reserves.  What part of your approval are you concerned about?

[bigman023]

I am waiting for the inquiry to fall off, for FICO purposes. Currently, I only have one FICO over 620 (TU).  But I have high utilization showing on the other 2, which should be taken care of in Sept.  Also, my 3rd trade line turns 1yr old in Oct. I also have CA that becomes 1 yrs old in Sept.  Im working off the assumption that getting my 2 CC's to 0% utilization, the last inquiry falling off, and the tradeline turning 1 yrs old,  will send at least one of my other scores over 620.  Im actually thinking Ex could be +630

The weak parts of my file are FICO and income/employment.  Im a seasonal W2 worker, and I also do some 1099 work.  So I have 1099, W2, and unemployment earnings I need to have used, to be approved for the loan  I've been doing this for a long time now.  I have tax returns that gives my income a 2yr average of 45K. This is based on the UW adding back depreciation, some one time expenses, and including UE compensation.  I feel I meet the conditions to use UE as earnings. Everything Ive read, tells me my employment and earning shouldn't be an issue. But I also know that it's  pretty much all up to the UW.  Im sure if I had  +660 FICOS, these things may not be an issue.  But I can't help but think that having borderline scores, and a non-traditional work history, may make an UW a little uneasy.  This is why I didnt want to apply until my CR is the best I can get it

BTW, how should the lease option have been drafted?