10-07-2011 06:41 AM
My fiance and I are looking to buy a house for the first time. I have a few questions for you. First, can you explain the difference between points and a down payment? As well as an advertised interest rate, vs. the APR? (I really don't understand this because banks are advertising a 4.25% interest rate, and then I've seen posts that mention interest rate AND APR... this is the first I've heard of it, so I don't understand.) 2nd, my fiance is doing the mortgage himself because I have over $100,000 in student loans and no bank will even consider using my info as well because of the loans. So, he has gotten 3 pre-approvals since April. The first is expired (and we really disliked the guy doing it... he wasn't willing to get back to us or anything) and the other two are more recent. We got the second pre-approval because our real estate agent recommended him to us. But he can't explain things to us in a way we understand them, and he wanted me to register for more classes (even though I just completed my MBA program) so that it would appear I was still in school and my loans wouldn't count against me. We felt that was really shady.
The third guy was recommended by my fiance's father, so Josh was pre-approved through him and we're meeting with him on Tuesday, despite the fact that he is so busy he barely found time to deal with us and it took 3 weeks to connect with him to get him to do the pre-approval. HOWEVER, we just saw an ad at a bank that says "lowest rates in town, no closing costs." We were wondered if getting a 4th pre-approval will cause problems with his credit score? He has a score high in the 700's and we don't want to ruin it, but the offer at the bank seems to be a great one.
Thanks for your help!
10-07-2011 10:52 AM
Can you provide good loan institutions?
Recommending a specific lender is generally hush-hush on here, though mentioning your lender is generally OK so as long as it isn't a promotion of that lender or a mention of any forum user on here. In other words, you might not get too many responses.
DW and I purchased our first back in January. Two months in advance, we made a list of all of the lenders locally in the area (we wanted to sit face to face vs. communicating via phone or e-mail). We then interviewed all of them and narrowed it to our top three, of which all were small banks. We liked our #1 on the list and stuck with that after sitting down and interviewing her.
10-09-2011 11:25 AM
Points are what is paid in connection with the interest rate on a loan, in general the more points you pay the lower your interest rate is. 1 point = 1% of your loan amount, so on a $95k loan amount 1 point would be $950. Down payment is also usually expressed as a percentage, i.e. FHA requires a 3.5% down payment, and that percentage is based on the sales price. So on a $100k sales price a 3.5% down payment would be $3,500.
The interest rate, or "note rate", is the rate your principal & interest portion of your mortgage payment is calculated at. The APR is the figure when you take into consideration the closing costs in addition to the note rate, so you can understand the tradeoff between the rate & fees. It's required to be disclosed to you which is why you see it everywhere, but in reality the important items to consider are the interest rate, fees & terms (fixed rate, for how long, etc.) when making an apples to apples comparison of two loan options.
It is important that you feel comfortable with the loan officer you are working with, if they are difficult to get in touch with before you make an offer, do you really think that will change afterwards? Things will just "click" when you find the right one. When you get your credit checked for a mortgage, you have 30 days until another credit inquiry for a mortgage would impact your scores, so if you get it checked every 31 days then yes it should ding his scores a few points each time. You don't need to have your credit checked in order to get a feel if the loan officer is going to work out, you should only have it checked when you know that is the loan officer you want to work with. It's not like credit is an issue with scores in the high 700's... bring in a list of all of your payments (or even a report from here at myFICO.com) and tell them to assume the credit is OK, if they can't make that assumption then you know they are going to be difficult to work with.
01-04-2012 12:25 AM - last edited on 01-04-2012 02:11 AM by MarineVietVet
Hi Shane! I live in the Las Vegas area and am looking into getting an FHA loan for my first home. My scores pulled by quickenloans.com were 650, 637, and 598 and when I pulled them on my own on 12/30/11 I got 640, 633, and 627. I have an income of 1600/mo that is solid and another almost $700 that fluxuates as my son is disabled and receives social security, but when he is in treatment, there is no payment. I only have one credit card with a very low limit (I like it that way) and can have it at a zero balance tomorrow if necessary.
I am hoping to purchase in the next 4 months and will be using a portion of my tax return to finance the down payment of 3.5%. I am looking at homes between 40K-70K (70k only if I receive assistance from a non-profit organization here). As far as debt goes, I made mistakes 10 years ago in college with credit cards (why I don't like them now), but there are 2 medical bills from 2005 that were refused by workman's comp for a total of 4k that will fall off in April/May of this year.
I have 3 very minimal medical bills ($35 here, $180 there, $40 there) from a car accident in 2006 that I guess were never paid by the at fault driver's insurance company. I then have a $12 home phone bill that I wasn't even aware that I owed until now from 2005, and one more medical bill of $380 from the birth of a child in 2007 while I was insured (I tried to get it corrected but they said it's been too long and insurance won't pay). I have a lien from the IRS in 2007 after I had filed my taxes wrong and a $2800 debt turned into $8600 with penalties and fees that has been paid in full and released as of 2010.
I had a student loan default from 2005 of $1050 in 2008 that is paid in full as of 2010 and debt from the VA of $811 for overpayment of educational benefits that was paid in full in 2010. I have rented in the Las Vegas area for over 9 years, never been evicted, always carried out my lease, and have been late approximately 3 times in all 9 years on paying rent (nothing more than a week due to payday schedule). The residence that I currently live in, I am on my 5th year lease and have never been late with rent.
All utilities are paid up to date and have not had any late payments in over 2 years and no 30+ late payments in at least 4 (if any, sometimes my gas bill was only $8 so I would let it double up... not sure what damage that could cause me, if any). Due to my son's disability there are times that I have only worked part time in the past in order to care for him. In 2007, I went back to full time employment and the company closed in 2008 due to the economy. I was on unemployment for 6 months and then obtained a job where that company closed 4 months later in 2009.
I have since been employed full time as of October 2010, but I left that position in March of 2011 when I was offered employment with the State of Nevada, I was then laid off at the end of June 2011 due to budget cut backs. I then obtained my current position 2 weeks after leaving the state and am very comfortable where I am at, even though the wage is lower than I could get, the people I work for are honest and my job is secure.
The home I am currently looking at is $65000 and there is another one that I like that is only $40000. Given today's market and my history, what is the chance that I will be approved for this FHA loan? I don't want to end up ruining my score with hard hits for a mortgage or get my hopes up to have it all be a dead end. Aside from medical bills, my total debt is less than $400, which I am willing to pay to close, but I won't attempt to do anything with it now since they have been dorment for so long.
I am a single mother of 3, one of which is disabled, and given this circumstance and the credit issues of my past, I'm almost "proud" of my current scores, as they are increasing consistently. Because of the lack of credit, would I have to go through alternative credit? manual underwriting? Would I be denied for not having enough credit? Please let me know your thoughts! Any help would be appreciated!
02-23-2012 07:17 AM
I've got pre-approved for $120,000 on 30y mortgage with exp 695 equi 678, and tans 712 scores, this is without my wife. Will that amounts remain the same when I find a house, and actually apply for my mortgage?, what if the house I want is 5 or 10 thousand dollars more than my pre-approval amount?
My wife has only had credit for almost a year, thats why I didnt include her in the pre-approval application, the officer told me she would need a score of 620+, and surprisingly, when I checked her credit, she had exp 700 equi 710, and trans 730. If I include her in the equation, will my interest rates and loan amount change in a positive effect?
Will it be easier to get approved?
The officer asked for my information while the pre-approval, he asked me for 2 years of emplyment. I gave him 1 year with my current employer, and a year with my last.
That, is not necessarily true because I was only working for my last employer for 6 months, that leaves me with proof for a 1-1/2 years of employment.
I know he will check my w-2 forms and find out, it also depends on how long I take to find a house, because if it takes me 6 months, they I've got all I need right?
My job before my last, was a cash job so I cannot report it, and I was not collecting unemployment. Is there any way around this mess?
My wife on the other hand has 5 years of employment to show!
The 3.5% downpayment, I posses in cash. The officer said I could not use it because I cannot prove how I earned it. So he said, give to a family member, and have them right you a personal check for the amount that states it is a gift for your new home, as long as they have that kind of money already in their bank account.
Will this work?
Thank you very, very much for your time!
03-10-2012 02:37 PM
I am currently in the process of trying to buy a home and went to a mortgage broker who pulled my cr's and said there was no score available. (Credco I believe was what the inquiry listed as). I have paid everything in cash for the past 12 years after getting into some financial troubles but new I would need to establish some credit so opened a credit card with cap 1 back in Jan. It has now been reported for a month so the broker did a re-pull but it's still not showing a score even though I have a score with all 3 bureaus. The broker doesn't seem to have any experience in this situation and I have no clue what else I can do to increase my score and my ability to obtain a loan. I owned a home about 14 years ago but of course all of this has dropped off of my reports. The broker mentioned looking at rental history, utilities, etc. but I rent a room so none of that is in my name.
EQ:589 as of 2/26 --607 as of 2/29
TU: 584 as of 2/26
EX: 593 as of 2/26
03-29-2012 08:35 AM
mdaniel100, I moved your question to the General Credit Topics board with the new title "What are my true FICO scores?"
03-29-2012 10:17 AM
I'm locking this thread to prevent it from becoming unwieldy. If you have specific questions about your mortgage approval saga, please start a new thread. Shane does not log on here that regularly, so posting questions on this thread directed to him may go unanswered for some time. Thank you.