Deleting as this was already done. 
Starting Score: 600 (Jan 2014)
@angel_baby_1_2 wrote:
- Credit. FICO ScoreWatch is 685, Discover FICO is 711, Husband's score are roughly the same. Both of these will most likely jump back up to 750+ as they were before after we pay off our credit cards which we are taking advatange of the 0% APR.
- Income. Myself 30k; Husband 20k+ (both yearly)
- Source of income. Both employed, I'm on salary and he works for his family's business.
- Monthly debt payments. Currently have 7k in credit card debts which we would pay off BEFORE applying for a mortgage. Therefore our monthly debt payments would be 0.
- Employment Both of us are working full time. We both graduated from school last year, and therefore have only started working this year.
- Assets/Reserves. ~8k in our bank, 40k safety deposit box
- Location. Nevada, Clark County
- Property. Single family home
- Value. Not sure how much we could QUALIFY for, but we would like something in the 300-400k range (we would like our monthly payments to be no more than 2500/month)
- Occupancy. Primary residence
- Transaction Type. Purchase, first time home buyers
It depends on your debt to income ratios - with those scores your looking at a 43% max back end ratio - this is all your monthly reporting debt and the new mortgage payment including taxes, insurance and mortgage insurance (only way to avoing mortgage ins is to put 20% down). The 40K in a safety deposit box is not something you can use, if you deposit more than 25% of your income into the bank the lender will ask where the funds were obtained and would want to see the "source" you can't source cash so they would not allow use of those funds. Now lenders go back 60 days on assets so if you deposited some of it and let it sit for a couple of months before applying then they would be seasoned funds and you would be in the clear. A 350K mortgage with 5% rate is about 1878 a month add 250 a month for taxes, 125 for homeowners and a couple hundred for mortgage insurance you would be around 60% DTI and thats too high. Best bet is go get a pre-approval and they will tell you your max.
@StartingOver10 wrote:
@angel_baby_1_2 wrote:
@StartingOver10 wrote:
@angel_baby_1_2 wrote:
@TheGardner wrote:
I'm not sure I would be comfortable in that price range. 28% of your income is a safe number for your mortgage payment roughly $1200 per month. Depending on taxes/insurance/PMI perhaps $200k?
Of course depending on the market in your area will determine if this is a workable number..
Good luck!
We're planning on going conventional, so I don't think conventional has PMI? Or it's much lower?
Conventional loans also have PMI (with a couple of rare exceptions) if you put down less than 20%.
PMI rate is based on your credit score. You get the best PMI rates if your score is above 720 or 740.
In your first post you said you made $30k and your spouse made $20k. In a later post you indicated that those are net - what does your W-2 say for gross income (each of you). That is what the u/w will look at ...
Also the $40k sitting in a safety deposit box won't be allowed unless you season it in a bank account.
We could put down 20% on the house if it's between 300-400k if it makes sense to avoid the PMI.
When we apply for the loan, our scores will be 750+
Monthly combined gross is $4,550.
From the research we've done, is it not possible to have the money "gifted to us"? I read online there is a max of 14k per parent or something of that nature. We were hoping that this is how it works so we could just give each of our parents the amount allowed of whatever we need, and them have them transfer it to us. If this is incorrect, how would we use the money that we have? Should we put it into our account? But I'm sure that would cause more complications...
Two points: (1) the $14k per parent is a different constraint that has nothing to do with qualfiying for a home purchase. There is no limitation as to how much a parent can gift of their own funds to your purchase. You are confusing the tax consequences of a gift with mortgage qualification criteria. Two separate items.
In a conventional mortgage 5% of the down payment must be your own funds and come from your own account.
(2) Taking the money from your safe deposit box and giving it to your parents to 'gift' to you is fraud. I'm sure you were unaware of that.
It is far better for you to deposit the funds you have in a safe deposit box into your bank account and let it season before you even start to look for a home. The seasoning needs to be at least 2 months or more before you make application for a mortgage.
You are still far away in income from qualifying for the size mortgage you are looking for. You will need to have additional down payment funds if the sales price is anywhere close to what you stated.
First of all I want to thank all of you for the all the information a guiding me through this. Really appreciate it!
1. From what I read, if it's under a certain amount and put in my account to be seasoned, it isn't questioned where it came from? Still really confused about the gifting thing. If that's not possible and I just need to put it in Our account to be seasoned, how would that affect our taxes?
2. Definitely don't want to commit fraud, so I'm glad I'm here asking these questions lol. Again, if I put that amount of money or even part of it in my bank how would that affect us in terms of income and taxes?
I didn't think we were that far because we literally have 0 monthly debt and with our gross monthly income would be able to fit around 1800-1900 a month which I thought would be good for ~300k loan. How far off are we 