Panic-Stricken Pregnant First Time Homebuyer

[Anonymous]

Hi everyone,

I'm kind of freaking out.  We just found out that we're expecting in September and we are frantically searching for an affordable home.  I know nothing about the process, what to expect, etc.  My thoughts are to get pre-approval and go from there.  The problem is that we don't have much, any anything, to put up for the down payment.  I am hesitant to use my savings close to 10k for it because in this economy you need to have some kind of a safety net.  If I use my savings, there goes the safety net.

Below are my details.  Can you guy help me understand what my chances are of pre-approval even if I can't put down much in terms of a down payment?

Scores: TransUnion: 761, Equifax: 798, Experian: 800

Income: 80K/year

Employment: same place for 8 years

Monthly debt: about $800 (car and student loans)

Location: Chicago or suburbs

Property Type: Single Family Detached or Townhouse

Value: $200K-250K

Occupancy: primary residence

Trans Type: Home Purchase (fixed 30 year)

Any help would be greatly appreciated by my husband and I and our little bean :-)

Thanks!!

[Anonymous]

Hi prgmrgirl,

I don't know why you're freaking out. You guys are in great shape. 

Based on the information you posted, I'd say you're golden.

Your debt to income is very low, your FICO scores are superb and

your income is right in the ballpark for the price range you're looking for.

You should be able to get an FHA loan all day long, as the minimum

middle FICO score to qualify for the best rates is only 620. You'll need

3.5% down, but if money is tight there are charities and non-profits that

can help cover that. If you go conventional you're gonna need 10-20% down

even with your great FICO scores. Last option is a USDA Guaranteed Loan,

which is 100% financing and the qualifying score for best rates is 620. This is

technically a "rural housing" loan but there are lots of suburbs in Chicagoland

that will qualify. Your income is within acceptable limits for this loan.

FHA 30yr fixed rates are 5.25% 0 points ; 15yr fixed rates are 4.75% 0 points.

Conventional financing for 30yr fixed is about 5.0% 0 points, but you can get

a lower rate if you pay points. USDA 30yr fixed runs about 5.3 to 5.5% for

the best rates and it's 100% financing. With a USDA Guaranteed Loan, a

lender makes the loan and the USDA insures it in the event of default.

So you have lots of options, but the government financing (FHA and USDA)

are the best bets if you want low money down or no money down. Banks like

Chase and Wells Fargo would be good places to start if you wanna go thru

a bank for your mortgage. If not, a mortgage broker is the way to go.

So get the money straight first and get pre-approved. Then start looking for a house.

The worst thing you can do is go house shopping first, fall in love with a place and

then find out down the road that you can't qualify for it....

This should get you pointed in the right direction. Let us know if you need

anything else. Enjoy the day!

CanDo

"The right attitude is everything"

[Anonymous]

Thank you so much, CanDo!  That is extremely helpful.  I guess my biggest fear is the idea of using up my savings which, the way things are right now with the economy, and with a baby on the way, doesn't seem wise.We currently pay a mortgage type rent ($1200/m) so its not the day to day that I was afraid of so much as the down payment situation.  

I'm hesitant to use charities or non-profits only because I wouldn't want to take from others who might not be as well off as we are.  We *were* going to wait a bit and continue saving for a downpayment so that we would be left with at least 5K in savings but now with the baby coming, everything has been put on a fast track.  

I didn't even know about FHA and USDA loans...that's how new to this I am.  I will do some research on points, as I am not totally certain how any of that works.  I guess we were hoping for the simplest most straight-forward loan possible.  There's so much out there, it's very confusing.

I plan to look into the USDA loans since you mentioned that they do offer 100% financing.  This sounds like it might be the thing for us.  How long does the process normally take?

Thank you again for your help!  Any other advice in terms of things I should look out for, avoid?

[DallasLoanGuy]

You will certainly get approved for FHA 3.5% down.

Your income will keep you from getting any free grant money to help with down payment.

If you qualify, there is a tax credit for homebuyers.  You could get a tax rebate(linterest free loan from the irs) to help with the reserve funds if this suits you. 

http://ficoforums.myfico.com/fico/board/message?board.id=loans&thread.id=29735

[Anonymous]

Thanks for catching that, Dallas.

I didn't realize that their income was too high for DP assistance.

Will keep that in mind in the future. Thanks again!

CanDo

"The right attitude is everything"

[Anonymous]

Hi again prgmgirl,

I sent you a PM that should help.

Just login and read at your leisure.

CanDo

"The right attitude is everything"

[WannaHouse]

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@Anonymous wrote:

Hi everyone,

I'm kind of freaking out.  We just found out that we're expecting in September and we are frantically searching for an affordable home.  I know nothing about the process, what to expect, etc.  My thoughts are to get pre-approval and go from there.  The problem is that we don't have much, any anything, to put up for the down payment.  I am hesitant to use my savings close to 10k for it because in this economy you need to have some kind of a safety net.  If I use my savings, there goes the safety net.

Below are my details.  Can you guy help me understand what my chances are of pre-approval even if I can't put down much in terms of a down payment?

Scores: TransUnion: 761, Equifax: 798, Experian: 800

Income: 80K/year

Employment: same place for 8 years

Monthly debt: about $800 (car and student loans)

Location: Chicago or suburbs

Property Type: Single Family Detached or Townhouse

Value: $200K-250K

Occupancy: primary residence

Trans Type: Home Purchase (fixed 30 year)

Any help would be greatly appreciated by my husband and I and our little bean :-)

Thanks!!

---

First..Congrats on the lil bean!

Is the above info just for you, or is it a combined income for both? Are you applying by yourself or with your husband? What are his income/scores?

I think either way, you should be just fine, but the USDA program does have income limits. If you can qualify, I agree that USDA or FHA are the way to go. 

Good luck!