Mortgage Assistance Needed.....THANKS!!

[Anonymous]

Hello. My husband and I would appreciate ANY guidance you could give us on ANY part of the following situation.  I have always sought (and obtained) good advice from many here and I am hoping you can give us some more information to continue to steer us in the right direction.

After a horrible accident that left me with a ton of medical bills, I had to file CH 7 in 2009 in order to start over. I have since begun the process of rebuilding my credit. We have had some late payments which presented a credit challenge but we have not been foreclosed on any property or had a short sale. We have not had any mortgage payments 30+ late in two years.  My husband has never filed bankruptcy.

Our true FICO scores provided to us by a mortgage lender two days ago: 659,661, and 679 and 658,645, and 699. I just paid $4K in debt off last night so I am hoping our scores will increase by the time we are ready.  

Monthly gross Income is $5100 / income is not taxable and we have no dependents

We sold our home last fall and are currently renting on a short term basis at $1250 /month.  Our landlord has given us until June to move so obviously if we move again, we want to move into our own place if possible because my husband has some health issues and we don’t want to keep moving.

Current credit card debt is $22,835 / we pay $499 per month towards it ($10K of which is a medical bill that occurred after I filed BK and began rebuilding my credit. The medical provider offered me a BIG % off discount off if I paid right away and I had no other choice than to make a bill to cover it).  Our current credit card limits available including outstanding owed is $43,810. We have newer cars that are paid off and no loans.

Our current savings is $11K / we have no retirement accounts or 401K’s. By May 31st, we hope have a total of at least $20K saved for a down payment on a house.  

Financing: I want to purchase a home but my husband wants a condo. We qualify for a VA loan based on my husband’s previous 20+ year military record.  We can use his VA benefits to purchase a home but cannot find one on the approved list that we like. One lender has told me that we can also qualify for FHA as well but again that list is presenting a challenge. This is not an issue if we decide to get a single family home instead as there is no list of approved properties.

We are currently interested in one foreclosed property with a purchase price of $220K, 10% down, taxes are $4980/year, insurance is estd at $800/year, and the condo fee is $140/month. One lender has quoted us this loan at 4.99, 30 year fixed, and no PMI. However, I am not sure of that interest rate as it sounds high (then again, maybe I am just thinking it is high because of FHA or VA rates which are much lower).  I guess I found it odd too because the lender quoted us this and knows nothing about our credit or income. She only inquired about how much down payment we have. BTW, this lender is the owner/bank of the foreclosed property we are interested in so I am treading lightly and will discuss our finances with her until I am sure this property is our final choice. This property interests us because it is a very nice neighborhood with properties that would cost about $250-300K even in this market.

That is our situation and any information you could give us would be appreciated. I guess I am simply looking for some guidance on your feelings concerning our scenario and options that may be available to us. I am asking BEFORE we take a leap … NOT after.  Thanks again for your help!!

[MovingForward_2012]

Hi and welcome to the forum. I had to file bankruptcy twice awhile back and now we are on contract for a home. First question is, did you incur those lates after filing bankruptcy or before? Late payments after BK look very very bad to lenders and I was told after BK you need to be a model citizen. When I was working with a loan officer this weekend, he told me if I had just ONE late, I was toast. So I actually do encourage you to have the lender run your credit and find out for sure what the lender thinks they can do for you. I'm not sure if the scores quoted are FAKO scores or fico scores. FAKO scores are meaningless and can be 100 pts higher or lower than your real fico scores so I encourage you to find out what your true fico scores are.

Mortgages without PMI come with higher interest so I would find out what your mortgage payment would look like with PMI/lower interest and without PMI/higher interest as the quote with PMI could be lower.

I had a mortgage broker run a preapproval check for me in July so that I knew where I stood. There is nothing wrong with that. By doing that, I knew I would be ready to go around this time. So I wouldn't get too far in the process to find out down the road after credit is run that you don't qualify.

I am also concerned about the high utility that you have on your credit cards and that you don't have retirement funds. Retirement funds are very important so I would start an account very soon. Lenders do like to see your last 401K statement. Can you pay your credit card balance down to 10%? The high utility is really hurting your score as utilization is a big component of your credit score.

If your current scores are fico, you do qualify based solely on scores, but I am concerned if you have late payments since filing BK. I don't know about VA loans and they may be more lenient on late payments after BK than FHA is.

[MovingForward_2012]

I do see now that your scores are true fico and were run by a lender so I apologize for not seeing that through first read. They usually don't dig into the lates until right before the app is sent to underwriting so I would ask if those pose a concern.

[DallasLoanGuy]

You should find a lender and apply....

[Anonymous]

No late payments since BK filed in 2009.

[MovingForward_2012]

PERFECT! Good to go! Go find a home!