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Suggestions for Mortgage Options??

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Alberio
Contributor

Suggestions for Mortgage Options??

My husband and I want to purchase a home in the next six months.  We are working with a broker, but I feel like the message from him changes by the day and wondered if anyone had suggestions about a lender that may work for us or whether what we want is just out of reach right now. 

 

Here are the stats - please let me know what I have missed that may be relevant.  I make $170,000/year and he makes $180,000.  I have $50,000 saved, with likely another $30,000 coming before April 1 from vesting stock options.  I may get a holiday bonus of $10,000 and I may be able to take $10,000 from my IRA as I think I qualify as a first-time homebuyer despite having owned a few times before since I have not owned in awhile.  My husband has $30,000 that he can contribute to down payment and closing costs.  That means I anticipate we have at least $110,000 for down payment and closing costs (estimate those to be $8,000), and could have as much as $130,000. 

 

That's the good news.  The bad is that my middle FICO score as of a week or two ago is 646 (646/646/681).  The broker pulled a 671.  My husband was at 710 when the broker pulled.  Our area is expensive, and to buy a home for a family our size will likely be at least $600,000.  That means we will be looking for a jumbo loan, with about 20% down.  It seems like from what the broker is telling us only my husband can qualify for a jumbo loan as my scores are too low.  His DTI is razor thin though, and way too close for comfort.  We have no DTI issue if I am on the loan too.  My broker tried getting a regular sized (sorry, don't know the lingo - a non-jumbo) loan with a line of credit to make up the difference with both of us on both.  But failed to get the line of credit.  He's chasing other options now.

 

I am not too extremely worried about stretching a little with a line of credit as the interest is still relatively low and, unless the stock market tanks or I lose my job (both highly unlikely, though there is some risk), I have an additional $50-75,000 a year coming in from stock options and restricted stock units vesting so I will be able to pay off a line of credit quickly.  My FICO score is being adversely impacted by a slow pay on my student loans due to a mix up at the bank that I did not adequately monitor and due to the utilization on my credit cards (about 65%).  It would take about $31,000 to pay my credit cards off completely.  I am hitting a dead end with trying to get the derogs off my account for the slow pay (it was one payment, but covered two loans, so there are two of them).

 

Time is of the essence for us for the move, due to school issues.  We can't afford to wait another year to bank more for a down payment unless we absolutely have to. 

 

I am wondering, does anyone know of any other options?  I'd like for us both to be on the loan.  Has anyone had success getting a jumbo in this situation?  Has anyone had success with the regular-sized loan + line of credit?   Is there a way to count me as a renter or another source of income for my husband if he is the only one on the mortgage?  I will be paying half the mortgage payment each month. 

 

I may be able to bump my FICO scores up a bit by paying down or even paying off my credit cards, but obviously that would cut into our down payment money.  If he is going to be the only one on the loan as well, I need to gift him the money ASAP so that he has it in his account for 60-90  days I believe.

 

Ugh.  I can tell this will be painful already!  Any help or guidance or suggestions are welcome!!  TIA!


Starting Score: 644 (EQ) 646 (EX) 670 (TU) as of 11/2013
Current Score: 732 (EQ myFico) 740 (EX myFico) 740 (TU myFICO) as of 8-25-14
Lender Pulled Scores (3-19-14): 709(EX)/700(TU)/670(EQ)
Goal Score: 710 (Made it!!)


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Message 1 of 5
4 REPLIES 4
GRate
Valued Member

Re: Suggestions for Mortgage Options??

If there are 2 borrower's on the loan, the lower score of those 2 will be used to qualify. So in your case, if you are on the loan it will be your score. You may have some options for a jumbo loan but the lowest possible middle score you need is a 660. The down payment would have to be around 25% for this to work with a 660.

 

If you can open a 2nd loan that could help you get to conforming range, which is a mortgage below $417k. If you're area is a high loan balance county (typically to $625k) you could have a chance to use your score with your husband.

 

Hope it helps..

Message 2 of 5
Revelate
Moderator Emeritus

Re: Suggestions for Mortgage Options??


@GRate wrote:

If there are 2 borrower's on the loan, the lower score of those 2 will be used to qualify. So in your case, if you are on the loan it will be your score. You may have some options for a jumbo loan but the lowest possible middle score you need is a 660. The down payment would have to be around 25% for this to work with a 660.

 

If you can open a 2nd loan that could help you get to conforming range, which is a mortgage below $417k. If you're area is a high loan balance county (typically to $625k) you could have a chance to use your score with your husband.

 

Hope it helps..


Please forgive my ignorance how does that work though?  I've seen multiple loans to obviate PMI, but are you suggesting there's things vis a vis 70/10/20 loans (may have second loan vs. downpayment reversed, downpayment last in my numbers) to hit the magic 625K line in my case on the primary loan?

 

Does that secondary loan simply factor into DTI rather than anything else with regards to loan underwriting?




        
Message 3 of 5
tooleman694
Valued Contributor

Re: Suggestions for Mortgage Options??

If it were me in your situation, with your income so high I would try to buckle down a bit and try to save an extra 100k to get it in conventional range.

Message 4 of 5
GRate
Valued Member

Re: Suggestions for Mortgage Options??

If your county loan limit is $625k, then the loan is not considered jumbo but instead, super conforming/high balance. Their are investors who can do 80/90% LTV/CLTV on jumbo loans and high balance loans. Basically it is an 80/10/10.

 

And yes a 70/20/10 is also possible. Dow payment of 10% only while opening a 20% 2nd loan to get you to the conforming limit.

 

Opening a 2nd loan would count towards the DTI.

Message 5 of 5
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