What do I need to qualify for a mortgage?

[Anonymous]

With a 600-650 you can still get a loan. If you're putting 3% down you can go FHA. Yes 600-650 is not the best and that what most loan officers will say but I say you can still get a great deal.

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adoorabell wrote:

I have been entertaining the idea of homeownership but have poor credit (600-650 scores) and little to put down (5-6k). I am 24 and have held a job in the finance industry for 5 years. I was looking at NACA because they offer a product for lenders with poor credit but they charge 50/month for 5 years and require you continue to go to classes 5 times a year for the life of the mortgage. I went to the fannie mae website link you provided. It looked like it was for brokers only. How do I find a broker that works with MCM? Please advise.

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[Anonymous]

Does Fannie Mae require all collections to be paid off?

[ShanetheMortgageMan]

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chinadoll22 wrote:

Does Fannie Mae require all collections to be paid off?

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Not on 1-unit owner occupied properties, it allows unlimited collections/charge-offs to remain unpaid as long as it doesn't affect Fannie's 1st mortgage lien position.

[Anonymous]

You indicate that if you are married they will use the FICO of the person who makes more in some of the loan programs. Would this also be the case for co-habitating couples who are buying together? If so, can you identify any lenders that use this method rather than mid score for lower scoring individual.

Thanks!

[Anonymous]

I am new to this forum.  Can someone get an FHA loan through Fannie Mae?

venus78725

[Anonymous]

Helpful advice, but what is PITI? It does not appear in the list of abbreviations. Thank you!

[ShanetheMortgageMan]

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venus78725 wrote:

I am new to this forum.  Can someone get an FHA loan through Fannie Mae?

venus78725

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Fannie Mae does not make loans, they guarantee to purchase them from a lender after it's funded.  So a lender will make a loan based on Fannie Mae's guidelines, fund the loan, and sell it to Fannie Mae.  FHA loans can be approved through automated underwriting (via Fannie Mae or Freddie Mac's automated underwriting systems) or through a manual underwrite.  FHA is a government insured loan, so if the consumer ever defaults on it, the government will guarantee to purchase the defaulted debt from the lender who makes the FHA loan.

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nature_lover wrote:
Helpful advice, but what is PITI? It does not appear in the list of abbreviations. Thank you!

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It's the total monthly payment of Principal, Interest, Taxes, & Insurance.  On an interest only loan it'd be ITI.  It also refers to the total proposed housing payment, so items like homeowners association fees would also be included in the PITI even though there isn't a letter in the acronym representing homeowners association fees.

[Anonymous]

To ShanetheMortgageMan or OneMortgageGuy

With the current market being the way it is....should I be shopping for a mortgage (200K) if my  -

(a) Equifax is 635

(b) DTI is  35%

(c) Credit file will be 36 months as of Dec 31/07

(d) Oldest credit is my current mortgage

(e) Same profession for 7 yrs, same employer last 3 yrs

I would like to get a zero down mortgage. I am in GA, and the builders are offering 6 months FREE (zero PITI for 6 month)

Also, I plan to put the current property on the market, and have contingency on purchasing new property pending sale of my current home.

Thanks, and your insights will be greatly appreciated.

[ShanetheMortgageMan]

Hi whoami, welcome to myFICO forums.

Lenders take the middle of 3 scores, so I'd recommend finding out what your other 2 are.  If they are all around 635 though that is enough to qualify for 100% financing for the best terms.  Since you would be dealing with the builder's finance company I'd recommend you contact them for their exact requirements though.  Nothing is for free though, you say there wouldn't be any payments for 6 months, but if you didn't take the no payments for 6 months don't you think the builder would drop the price.. or the mortgage amount would be less?  Usually with the 6 months free the amount is financed into the mortgage, so you are paying interest on the interest you defer.  Your DTI at 35% is solid. 3 trade lines, with at least 1 for 24 months should be enough established credit history... so you look OK there.  Your employment is fine as well, 2 years in the same job/industry is the longest requirement these days (some lenders require 3 years self-employment but since you are employed you don't need to worry about that).  Only other area I'd make sure you are good in is having at least 2 months PITI in reserves after any down payment/closing costs are paid for... I prefer 6 months, because you never know what the future will hold, but 2 months should suffice.

[Anonymous]

ShanetheMortgageMan,

I checked the 3 bureaus and my mid score is 620, so I guess I may be out of luck  for the next few months.

The good thing is I have no liens, derogs or collection in the last 36 months. I have 6 trade lines (Citi Visa&MC /Chase Visa /Centura Visa /Amex) which are all paid on time - everytime with 2 of them at least 24months old.

What sucks is that taking advantage of zero percent rates in credit cards to make some cash somewhere else ends up dinging my scores grrrrRRLLLL !! ....

I also guess having a short history (i.e. less than 5 yrs) sucks

Message Edited by whoami on 11-19-2007 06:50 PM