Nephew $330k Mortgage questions..Private Owner Financing

[LuvsRetro]

Nephew is in need of traditional mortgage financing and has asked me for guidance.  He wants to apply for a mortgage before the end of the year.

So, I am asking  you guys for guidance.

He is in contract with a private seller.  $330,000, pd down $30,000, with monthly pmts of $1,600.

Credit not so good, low 600s.

Income: $145k.

Married, wife is student

Monthly pmts on other debt, including auto:  <$600.00

He banks with Bank of America.

Would it be better to pre apply with several companies?

If so, which should he stay away from?

Any benefit to online applying versus in bank with a credit union?

What documents should he have ready?

[pipeguy]

$300k at 5% for 360 months = $1610 for P&I, but with a private seller I assume there will be no escrow account so depending on where the property is you can add $300 to $700 (rough range) to that payment for taxes and property insurance. There will be some closing costs, although not as high as a mortgage designed for resale (as most are).

Assuming the deal/loan is approved it's not a bad one considering interest rates will be going up over the next couple of years. If the seller is the one offering the private financing, I'd be sure to get an appraisal and top to bottom home inspection. It can't hurt to get a pre-approval through a bank or credit union just to compare costs, or as a backup plan. 

I recently refinanced through NFCU - it was almost all online (I faxed in some documents through a local branch and some additional ones through my office) and they walked me through the process - very easy.

[NC_Mtg_Loaner]

Find out how to get credit from low 600s to mid-600s ASAP and he'll save more money than if he switched to Geico.

Seriously, he certainly earns enough income that he can "throw money" to fix what's wrong.   If he does that it won't matter where he goes to get his loan but if he stays in the low 600s whoever can finance him will profit greatly from him on this deal.   

Most tradition lenders have conventional loans available thru FNMA/FHLMC but you need to have at least a 620 but even with credit < 680 he's going to "overpay" for his PMI since he's only putting down 10%.   When he's ready to proceed for his loan he'll need two years W2s and or tax returns, 30 days' paycheck stubs with YTD income info and two months' bank statements showing funds for the transaction.

Good Luck and congrats!

[LuvsRetro]

I am going mention the Navy...He may can get an in via his deceased grandfather.

I think he said that he had one year per contract to get personal/his own financing.

[LuvsRetro]

I have not looked at his credit report as of  yet....

But, I could put him as an AU.

He is just not sure what to do and doesn't have the time to figure it out.

He has paid off some of the debt...however, he has an old reposession.