Operation Condo

[Sk8lyn23]

Im new to this forum and am interested to see if anyone would like to add some insight to my dreams of owning a condo at the age of 23. I live in San Diego, CA and currently live at home while trying to save for a condo as renting seems to be a waste of money to me. Condos are going for around 125k in my area and i would love to jump on the opportunity to own a place.

To get straight to the facts

Monthly Income = 2280

Monthly Bills = 600

Monthly Savings = 500

Current Credit Card Debt = 5300

Credit Card Debt by 06/09 =1000

Total Down Payment/Closing Savings by 06/09 = 3000

 I am also buying this condo with my boyfriend who has a collections ding on his credit from an unpaid hospital bill in 2005.

His Monthly Income = 1840

His Monthly Bills = 500

His Monthly Savings = 400

Current Credit Card Debt = 700

Credit Card Debt by 06/09 = 0

Total Down Payment/Closing Cost Savings by 06/09 = 2400

My credit score is  674/689/675, which I am working hard to bring up to a 700 average. Im not 100% sure what his are at this exact moment. Basically, I'm not looking for specifics, Im just curious if I would qualify for a FHA loan on my own, with him, or will i be laughed out of the loan office with nothing but a bursted bubble of a dream??

If anyone can give me any guidance to what I can or should do to improve my chances please feel more than free to give me any insight. It will be greatly appreciated.

[ShanetheMortgageMan]

Welcome to the forum.

1st, make sure that the condos you are looking at are on FHA's approved condo list at https://entp.hud.gov/idapp/html/condlook.cfm.  Just because they aren't on there doesn't mean you can't use FHA financing, but condo complexes that don't have all financing options easily available for them typically are worth less than condos that do - reason being is simple supply & demand, if your condo is FHA approved then there will be more demand for it vs. other condos which are not FHA approved.

How does the $600/mo of bills break down for you and the $500/mo in bills break down for your boyfriend?  Is any of that debt or just bills like utilities, cell phone, insurance, etc?  Typically it's only the items on your credit report that are included in the debt to income ratio lenders use to qualify you.

You listed the date of 6/09 a couple times, is that when you anticipate buying a home?

Definitely recommend you check your boyfriends scores, or have him do it, here at myFICO.com.

What is you and your boyfriends employment history like for the past 2 years?

[Sk8lyn23]

Thank you for responding. I will look at that list of approved condos after i post this.

 My $600/mo bills break down as

$300-car

$100-phone

$200-credit cards (which I am paying off so soon that will be out of the equation)

His $500/mo bills break down as

$300-car

$100-phone

$100-credit cards (but his is paid off in full every month)

Its good to know that our phone bills will be excluded from our debt to income ratio. Every little bit helps.

6/09 is when i hope to buy. I know things dont always go as planned, but I want to be in my own place by the end of this year at the latest.

I will have him check his scores soon, I know that he has a collections ding on his credit. Is there any way to get that cleared? He was never sent a bill and has not been able to track down the company who now has his bill, which was only for a matter of $100 or less. He says he can easily pay them, but has no idea how to get in contact with them. Is there a way we can look them up and at least have it paid off, and get a note it has been paid?

I have worked for the same company on and off for 4-5 years. I will have been working for this particular location for a year in March, 2009. Before I came back to the company I worked for Circuit City for 6 months as I moved to Florida and then when I moved back to California I came back to the same company I worked for before I moved.

He recently moved here from Florida and has been working at the same company for a year in May, 2009. He is currently applying for the California Highway Patrol, which is a long and tedious process. His pay will be much better, but will it hurt our chances if he switches jobs right before we apply for a loan? If so we will just wait it out until he has a longer work history.

How long is considered good work history?

Thanks again for your information. It has been very helpful

[Sk8lyn23]

Question.. I am getting my Tax refund and a resonable scholarship.... Should I..

A) Pay off more of my credit card debt

or

B) Put it in savings.

I have read that when applying for a loan they pull bank records and often dont count money that has recently been added to an account. I will be saving roughly $500 a month towards my down payment. If I pay down my credit card debt I will be paying less a month and not being hit with interest which would allow me to save even more than that $500 per month. I don't know if i misunderstood what I read, but in my mind it would be easier to pay off the majority of my credit card debt with the lump sums of money I will bet getting and squirling away a little bit from pay check to pay check for the dp...

[Anonymous]

It is not that they will not count money added recently.  They will just want to know where it came from via documentation.  They want to make sure it is not a loan you have to pay back, a credit card, pay day loan, or something of the like that may have an affect on you paying your bill.  So, having your cc all paid off and putting money into your savings each month will be fine.

[ShanetheMortgageMan]

You will need his income to qualify, even if you didn't have the car payment.  You could qualify on your own for something cheaper, around $100k or so, but that is pretty bare bones I'm sure.  With him on the loan you'd qualify for $125k, and possibly up to $150k.  Your employment history is fine too.  If going into the CHP would be a career advancement in terms of pay then an underwriter shouldn't have a problem with it, sometimes 30 days of pay needs to be received though.  2 years in the same career/industry is the general rule, but it's one of the more lenient guidelines.  As far as taking care of collections and what not you'll want to head over to the general credit section and inquire there, as they are experts in that arena.

[Anonymous]

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@Sk8lyn23 wrote:

I will have him check his scores soon, I know that he has a collections ding on his credit. Is there any way to get that cleared? He was never sent a bill and has not been able to track down the company who now has his bill, which was only for a matter of $100 or less. He says he can easily pay them, but has no idea how to get in contact with them. Is there a way we can look them up and at least have it paid off, and get a note it has been paid?

---

Piggy-backing on the other advice 'cause this is important.  Please don't let him pay the collection until you guys do a little more research.  Paying a collection won't help his score any.  It needs to be removed.  Once you pay the collection you lose a lot of leverage with the slimy companies.  The folks on the Rebuilding board can give you a better idea about the recommended process, I think it is a combination of making the company validate the debt and then offering to pay only if they agree to delete the account (must be in writing due to previously mentioned sliminess).

[Sk8lyn23]

Just an update on Opperation Condo. We have been pre-approved for 135k with 5k down. Haven't been given a rate yet, so not sure on that. I'm just happy we got pre-approved. Now the search has begun, and I thought the pre-approval was going to be the hard part. We put in a few offers to have our first one go with an all cash offer. We have two more offers out on the table Im just waiting and anticipating that someone bites. Ill post what the rate is when we get to that stage.

I have a question. Does anyone seem to see the price of housing going up or bottoming out in your area? I don't know if its just because we are looking more, but it seems like all the places that were nice and in reach are slowly drifting into higher prices.

- an update on the collection. We talked to the LO and she said any unpaid collection would need to be paid in full, so we did end up paying that. I had to call about 5 different places to track it down, but its PIF.

Thank you to everyone on the forum for all the advice thus far, I will most likely be asking a ton of questions as the process continues. =)

[Anonymous]

In this last few weeks in my area is seems there has been a large increase in houses coming on the market (typical of the time, i'd imagine) but prices are still dropping. They come on the market at a certain price, then drop a few grand every couple weeks.

That being said, the nice ones do go fast!

[Anonymous]

Hi Sk8lyn23,

Congrats on the approval I'm currently in the San Diego area too. Who did you go to for your loan? I'm nervous as to who to go. I'm hoping to apply in August.