Qualifying?

[Anonymous]

So my original plan was to wait and clear off some utilization and save up for a down payment... but home values are starting to skyrocket where I'm at and I really don't want to roll into another lease (existing house is a little cramped). So I'm halfassed shopping for a house but I'm not sure if I could even get qualified for a loan. We went and looked at some houses this past weekend and before getting any deeper into the process I figured I'd see if you guys think it's even worth moving forward.

I would be looking at Navy Federal's portfolio loan ideally, with the zero down option (since obviously).

1. Mortgage Credit Scores:  

• EQ Fico 5: 661
• TU Fico 4: 640
• EXP Fico 2: 701 

2. No negatives on my file. 

3. Gross Income.  

• Gross income- 83k salary, roughly 10k bonus potential 

4. Source of income.  Where is the income coming from? List each source.

• Full time W2 employment. There are some perks that count as income (use of new vehicle is put in as income and then deducted out).

5. Monthly debt payments. 

• Student loan payment plan- $165/mo, total debt: $40k
• Amex minimum payment- $66
• Barclay minimum payment- $45
• BoA minimum payment- $35
• Citi minimum payment- $25
• Discover minimum payment- $35
• Fuel Rewards minimum payment- $25
• Lowes minimum payment- $28
• Virgin America minimum payment- $40
• PenFed minimum payment- $200
• Amazon minimum payment- $35

6. Employment (for those who are employed). 

• Type of employment: 
• W2 employee. 16 months employed. Was at previous employer for 3 years. Been in my industry for 13 years. 
• 7. Assets/Reserves. 

• Assets - about 2k in checking, no savings other than an HSA that’s around $500

8. Location:  This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.

• 72712 and surrounding areas… Bentonville, AR 

9. Property Description: 

• Haven’t landed on an individual property yet. But looking at something to be a single family house. Most everything in this area is occupied or recently vacated. If it matters, I am also looking at properties with land in the 3-5 acre ballpark. 

10. Property Value. 

• The houses that I like are in the 225-275k range. I doubt I have enough purchase power for that, but the market for what I'd like is there.

11. Occupancy. 

• It would be primary residence. First time buyer. 
• 2 people living there. Secondary income 100% commission. Been out of work a couple times in the last couple years, income negible. His credit sucks, not ideal to have him on the loan. 

12. Transaction Type.

• Purchase.

Have a decent file, good mix. Just about $30k in credit cards from a family medical situation and my partner being out of work off and on for the last 2-3 years, and $40k in student loans. My bring home is about $1000 weekly, not sure if that is considered when DTI comes up or not. What do you guys think? Should I just grit my teeth and do another lease or stay in the cramped house we are currently in?

[Revelate]

I can't answer that fully but that revolving utilization is absolutely killing your score based on your claim of no negatives, and is a huge financial sinkhole if we're talking typical credit card APR's: we're talking on the order of 6000 annually or $500/month just in interest charges if around ~20% for napkin math.

There's tradeoffs involved to be sure with market timing, but if it were me I'd grit your teeth and fix that: if you're in any major metropolitan area have your partner start driving Uber or something to help out too, but I'm not confident in suggesting you should be applying for a house right now even if you might be able to get someone to approve your file; I'd stop the bleeding first as owning a house is not likely to improve your cash flow.

[NC_Mtg_Loaner]

You have the profile of someone who would be approvable/eligible for a mortgage loan---if you had the money for a down payment and / closing costs.   Do you have any family member(s) that could provide you with a gift of funds that you can use for a down payment?