Mortgage Loan, do I qualify?

[Anonymous]

Just would like to get the experts take on my situation.

1. My scores EQ 699, TU 702  Husbands EQ 691, TU 687.  I have a collections for verison that I paid in full in 01/2009. This was my mothers phone not mine. She never told me she didn't pay the bill or I would have. Irrelevant info. I also have TXU Electric which is claiming that I owe one last bill to them of $166, 5/2010. I have not paid it. They never tried to contact me about. It just showed up on my credit one day.

Husband has 2, 30 day lates on lowes card 4/2007, 06/2009.  Capitalone card has 1, 30 day late  3/2010. Thats it.

We are working/fighting with the IRS about our 2008 taxes. They are claiming they never received our pre tax payments. We are working with our CPA and an IRS tax advocate to get this worked out. I have copies of canceled checks, just a matter of getting through all the red tape.

2. Income is kind of tricky we own 2 business so we only take what we need to pay bills and have a little extra. But to take a stab at it I would say 100,000.

3. Our business's

4. $43 Mastercard (can pay this off at anytime)

    $373 Auto (trying to sell this)

    $211 Auto (only has one more payment)

    $552 Auto

    $577 Mortgage (home has been rented out for the last year)

    $145 Boat

5. ME- Self-employed (LLC) ,4 years in the profession ,3 years self employeed

     Husband- Consultant (s-corp), been in the field for 8, 4yrs self emplyoyed. 

6. Business accounts total 95,000 ( We can use as much of this as we want, but...). Personal 3000. We could put down 20% but we are opening another business location and do not want to spend more cash then we have to. We wanted to do between 5 and 10 down.

7. Smith county, Texas. Home has ag exemption for growing roses (8.25 acres comes with home, only has 10 roses bushes but I guess thats all it takes).

8. Single family home, 8.25 acres. Home is in move in ready condition, immcaulantly maintained.

9. Asking price at for sale by owner was 233,000, listed with realtor 229,000. Owner came right out and said he would negotiate with me since I contacted him before they listed with realtor and would be willing to come down to not have to pay realtors fees.

10. This would be our primary residence, but we have a VA loan on a smaller home in the same town that is currently rented.

11. Purchasing the home.

We put in an offer on a home last year at this time and lost the house because of the 2008 tax issue mentioned earlier. We do not have our 2010 taxes finished yet, I say we I mean the CPA, but an extension was filed. We will owe money on the 2010 taxes. Hoping to use the 2008 &2009 transcripts since 2010 is not finished. We qualified for the 209,000 purchase price of the other home with our other mortgage and higher balances on our credit. Our score was higher last year ofcourse but with the pulls from a few lenders for mortgage, auto, boat and 1 cc its lower.

Question, we do have Va entitlement left 9,019 to be exact. Can we get anothe VA loan? or should we go FHA. I also looked into homestyle and it says they are not giving those out. Windows need to be refinished in the home and the outside needs to be painted.

Ok so we have 10 cc's between my husband and myself. One is a business card that he uses but we usually pay it off every month. Sometimes we wait for a reimbursement for an expense but that only happens a couple times a year. But it is zero now. We have one other card that we carry a balance on and its the one we have had the longest. We have about 80,000 in revolving credit and we have 2,300 on the one card. I recently paid of Lowes, Kays, & Best Buy. So what hurts my score more, loans or cc's? We have the 3 autos, one that is almost paid off, and a boat.

I greatly appreciate any comments and help.

We would love to have atleast a score of 700 before the lender pulls our credit.

Thanks

[Anonymous]

I forgot to add that we are going to ask the seller to pay all of our closing costs. There are a few things that need to be done to the home.

Thanks Again

[Anonymous]

Does anyone wanna give me their two cents on this?

[Booner72]

Hi there - my 2 cents is your collections as they are pretty recent.   I've heard that a person needs 12 months "clean credit".  I've also heard that they allow collections to be paid at closing, so that paying them won't affect your score.  I'd kill for your scores, so I think you are fine in that regard, but the only thing I know is what I've been reading around here.

Good Luck!

Have you tried Pay for Deletes with those collections?  Have you made any attempts to get them removed?  I have some that I'm stuck with, but luckily they are a few years back.  And they're paid.  And they're medical.  Also I'm assuming those 2010 taxes will def. be an issue because I've had to submit my taxes already for 09 and 10.

[ShanetheMortgageMan]

Interesting break on the property taxes - never knew Tyler was the Rose Capital of America.  Without VA, if you can put 5% down you should be in pretty good shape, even less can qualify but you may not have conventional financing as an option.  Your late items are over a year old, so that is good, but your issue is going to lie with the 2008 tax returns unless you have cancelled checks for the full amount owed, which it sounds like you might have.  Your 2010 tax return doesn't have to be filed, but your CPA will have to prepare a profit & loss statement for 2010 as well as a YTD profit & loss statement as well... and considering that 2008's income tax was owed, I could see an underwriter wanting the CPA to confirm how much taxes are owed for 2010 as well, if any, and if there are taxes owed then that amount of money would be deducted from the available assets you have to qualify with, which it sounds like you may be able to absorb and still be able to have the down payment & reserves, if needed.

But it sounds like using VA could be an option, as if you have $9,019 in entitlement left, it sounds like you may not have used any of the 2nd tier, which is another $68,250.  In order to use the extra $68,250 you have to finance more than $144k, so your $233k sales price would trigger it to kick in.  The amount of entitlement represents 25% of the amount of 100% financing - so $25k of entitlement = 100% financing on $100k.  So $68,250 + $9,019 = $77,269 = 25% of $309,076 you could do 100% financing on if you have your 2nd tier.  If you are looking to put as little down as possible, that is the best way to go.  If you had 20% down, and you are not exempt from having to pay the VA funding fee, then conventional financing would likely be the better way to go.

http://www.benefits.va.gov/homeloans/docs/guaranty_calculation_examples.pdf - example #5 probably is closest to yours.

[Anonymous]

Thanks Shane! Its always nice to have an outsiders professional opinion that doesn't have a vested interest. We will not have a problem absorbing the taxes.

Your are right and we have not used the second tier on the VA. Someone told me that with a VA loan you do not have to pay PMI, is this true?

I greatly appreciate the help. Looks like I'm off to get some paperwork together so I can buy a new house!!!

[Anonymous]

Booner72

I paid the one CL and they guy told me that they would not report it on my credit and then it popped up. My fault for not getting a letter. It reports as a CL but a paid one.The other one I have no problems paying. But I am worried about calling them and them doing something to my credit before I get the house. Niether of these are on my husbands credit and I don't want my score to be the reason we would not get approved. But they were both on there last year when we applied and got approved.

I am sure your credit score will get better. We have all our bills on bill pay and keep our CC usage as low as possible.We also pay are CC's 5 days before they are due. We even pay extra on our car, boat and home loans. I was told that it helped with your score, not to mention it saves me interest in the long run.  I wish mine was better also

[ShanetheMortgageMan]

You are welcome - and correct, no PMI on VA loans.