Qualifying for a mortgage

[Anonymous]

Situation:

We want to purchase the home and land we have been leasing with option to purchase for over 2 years. The current payoff would be about 54,000 including the credits we receive for the monthly payments. The property appraised last year for 109k. But, I don't believe it will qualify for FHA because it sits on 20 acres and the home needs a new septic and about 5k worth of additional repairs and was originally a 1984 double wide mobile, although it is now on a permanent foundation, has been rocked in, added on to, and has a shingled roof that has been raised above the original height.

My wife has good credit scores, of 755, 742, 713.
She has 2 vehicle loans and total debt payments of about 1000/mo

She has 26000 in revolving credit limits and we only use the cards to get reward points, so the balances are usually paid off every month, but may show up with 1000 or so in balances on a credit report, depending on when they report.

But, she only makes about 28,000 per year.

I took off most of last year (2015) and all of the year 2014 for a variety of reasons (including starting a faile business) and only worked 2 months, so my 2015 income was just 26,000. My W2 income this year should be about 65,000 (not including a bit over 30k in per diem at 125/day that I realize won't count towards income). I have projects lined up for the next two years with my current employer and should make 100k plus and per diem for at least that long and the per diem will become taxable in a few months. I have lower revolving credit limits, but similar usage, with a normal utilization of less than 10 percent. However, I had a failed business venture a few years ago and ended up with 10 collection accounts that are all showing now as paid in full, most paid off in the last few months. My scores, because of this, are 637, 654, 671. I have no vehiclr, mortgage or personal loans or any other monthly debt payments and have 4 inquiries in 2 years, 2 in the last year. I do have a lot of decent credit in the past and the reports show no recent lates.

We have no problem paying 20 percent down on the balance owed (11,000 down) which would bring the total amount borrowed to about 43k plus closing and etc. costs.

Is there anywhere that would approve this? Most of what I've found seems to eliminate the property as a possibility because of the mobile home or because of the size of the property and we have her low income, my low scores and my mixed work history for the last two years.

I'm not in a huge hurry, but would like to do this whenever possible. We have 3 kids at home and another on the way and plan on having 1 more after that and I want to build a home for us on the property (I do this professionally and actually have all the materials stored for the project now, but don't want to build a home on property that isn't in our name).

Thank you for any guidance that you might be able to give in advance.

[stellar]

I would just get a personal loan with  avant, sofi, prosper or any similar type.  Then you don't have to worry about going through the mortgage process.

[Bug101]

From my research and understanding you will find it VERY hard to get a mortgage for 50K or less. Loans in this amount usually have to be done via personal loans.

Personal loans are also much easier and faster to get.  Stellar mentioned several lending "clubs" and while they do work well for many, the interest rates are really high no matter how perfect your credit is.

I would join a credit union if you do not already belong to one, then get a personal loan through them.  Even your bank.  Upu bank and or a credit union are almost always better rates than the lending clubs. 

You should find out what your "mortgage scores" are, not your fico8 scores.  Most banks use the same scoring for personal loans.

You may find that it is better to have your wife only on the loan but you also be put on the deed.  If you are also on the loan they will use yoru scores as well and unfortunitely your scores are probabaly hurt and not help.  They use the 2 middle scores between the two.

For example: lets say your mortgage scores are the same as your fico8 scores.  They would use 742 from your wife and 654 from yours.  Resulting in a pretty high interest rate.  As where just your wife they would use 755 and 742, and both of these scores will get you a super interest rate.  However, chances are very good that your mortgage scores are going to be approx 10-60 points lower than your fico8 scores.  This of course is just a guestimate, and just meant to give you an example.

By doign a personal loan, as long as the property appraises high enough to over the laon amount in it's current condition, I doubt the bank will careabout the spetic etc.

Personal loans only need colateral.

I hope this info helps.

[StartingOver10]

^^Agree for the most part with the above.

Most of the time I don't believe going to a big box bank is in your interest, but for small mortgages, it seems to work.  CU's are a great resource for small mortgages.

Point of clarification:  you don't need to have an additional down payment to obtain a mortgage on a property that you own. It technically would be a refinance because you own the property and the seller is holding the note (right?). 

Consider checking with small regional banks in your area and ask if the land size is an issue as well as the manufactured home. I bet there is a portfolio product available.

Personal loans do not necessarily require collateral at all. Depends on the lender and the borrower qualifications.