Is there a chance of me being approved?

[Anonymous]

Hello and forgive me as I am brand new to the forum with questions.

Need some advice as I am looking to buy a condo and wanted to know what are the chances of being pre-approved.

Score - 693, No lates or any negatives

Income - $34,320

On the Job - 10 years this Aug

BK - May 1999

Loan - Auto Lease $345

Credit Cards Balance: 4K

Cash Available - 30-40K

Condo Price 200K in RI

Based on the info what are the chances of being pre-approved.

Any help would be greatly appreciated

Message Edited by MrsB on 01-13-2009 05:24 PM

[ShanetheMortgageMan]

Welcome to the forums.

Your debt to income ratio could be high without a significant down payment, and depending on property taxes & HOA fee.  Do you know how much are property taxes & the HOA fee going to be?

How much is the min. payment on the credit card debt?

Is it just going to be you or is there a co-borrower or a non-occupant co-signer?

[Anonymous]

Thanks for the help as I am a big stress ball over this.....ok here is the picture my fiance and I are getting married 10/10/09 and are looking at this specific condo right now however he was in nightclub business and therefore his credit is worthless and also there are some legal situations as well. 

As for the property taxes I am estimating them between $2000 and $2400 from what I can see on the others that have sold.  You will have to forgive me as I am not aware of what an HOA fee is sorry.

His mother is going to gift to us the 20% down for the condo and as for the min credit card payment it is $80.  I am putting it my name only due to the facts stated above.  I may have the 4k credit card debt paid down lower by the time we plan on making a move which probably won't be until June.

I hope I was able to give you the info correctly

[ShanetheMortgageMan]

HOA stands for homeowners association, and when you are buying a condo there is almost always a monthly HOA fee that you pay directly to the property management company which manages the condo complex/project.  It can be anywhere from $100/mo or so, all the way up to thousands, all depending on the amenities, age of the complex, and other various factors.  For us normal folk who'd be buying in the $200k range you could expect your HOA fee to be in the $200-300/mo range.  If you have a listing for the condo it probably has the HOA fee listed on it.

Even with 20% down your debt to income ratio is a bit high - assuming you get a 5% rate, $200/mo for taxes & $250/mo for HOA, your housing ratio is 45% and your total debt to income ratio is 60%.  However since there is 20% down and you'd still have $30-40k leftover in reserves afterwards, those should be enough compensating factors in order for that high debt to income ratio to get approved.

[Anonymous]

Thanks Shane you are making me feel a little better .... ok the HOA is $159.

Now for my mistake the 30-40K I listed above is the gift from his mom for the down payment however my 401K has 15K in it so does that make my picture look worse?

Also is there anyway of having any of his income to help me get approved without his credit or name being on the condo?

Sorry for all the questions ..........

[ShanetheMortgageMan]

Can't use his income unless his credit is also considered... but with the lower HOA fee the DTI would be more like 42/57% so that is a little better.  With conventional financing 70% of the vested amount in your 401k can be used to qualify, so $10.5k, or about 8 months PITI reserves... and that should still be enough of a compensating factor for you to qualify on your own.

What is his credit like?  Scores, negatives, etc.?

[Anonymous]

Don't know but if i had to guess I say he is probably 300-400 range ughhhhhhhhhhhhhh and there is a possible judgment coming down the road from the last disaster of a club he owned and that is the reason we want this in my name only.

Ok so basically what do I need to do from now until June to get myself into a better place for this?

I really would like to buy this condo as it is closer to my work and it is exactly what we want

[ShanetheMortgageMan]

Yeah without some major cleanup he shouldn't be on the mortgage.  Well the only "weakness" is your debt to income ratio, and the only way to reduce that is to either make more money or pay off your debts.  I'd strive for at least a 720 score too, probably will be pretty close if you pay off the credit card debt.

[Anonymous]

Thanks Shane .... I will try and knock down the CC bills to get a better score.  You have a great help and have eased my mine a little.  Unfortunately like many others we will not be getting raises here nor did we get them the last 2 years so that's a little frustrating however at least I have a job.