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What do we need for a morgage loan?

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Anonymous
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What do we need for a morgage loan?

What are lenders looking for as far as reserves,credit TLs,ect?

 

Do we "need" credit cards or are installments enough?Do we need open TL or will having no debt be fine?

If we do "need" cc's how many and for how long?

 

What is the magic # to breeze through with little road blocks?

 

What about pmt shock?I pay very little to rent(lot rent) since we own the mobile home we live in (cash purchase)

 

 

:: details::

 

regular paycheck income

 

looking at usda gua. loan or FHA

 

only debt is a car pmt. have 24 months left on it

 

have been in same line of work 20 yrs

 

have lived at same address for 7 yrs

 

 

 

 

Message 1 of 6
5 REPLIES 5
ShanetheMortgageMan
Super Contributor

Re: What do we need for a morgage loan?

For USDA or FHA no reserves are needed unless you need to compensate for something (a high debt to income ratio is the biggest item that people usually have to compensate for).  Trade lines - at least open 3 trade lines with 12 months of on time payments reporting to each, not all lenders need it though, and non-traditional credit (such as rent, utilities, cell phone) can be used as well.  Can be a combination of credit cards, installment loans, and mortgages, or it could only be one of those types, you don't need a diversity.  Some lenders limit payment shock to 200%, but most lenders don't have such a guideline.  Not really any magic #'s to "breeze through", every situation is judged by it's own merits, but if you have a 620 FICO score with clean credit for 12 months and no BK's for 2 years and FC's for 3 years, debt ratio no more than 31% for the house and 43% with everything else included (29% & 41% if you are doing a USDA loan), and have the required minimum down payment, then you should have a real good chance of qualifying.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 2 of 6
Likopass
Established Member

Re: What do we need for a morgage loan?

Great info Shane! I will be pretty close to the 12 months clean in November, with everything else in order (scores, etc.) However I would like to try start and maybe complete the process before the tax credit deadline? Do you think I would be okay trying it a month or so early?  

Message 3 of 6
ShanetheMortgageMan
Super Contributor

Re: What do we need for a morgage loan?

Liko, what type of negatives are there in the past 12 months?  Is there a bunch from 13-24 months out too?
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 4 of 6
Likopass
Established Member

Re: What do we need for a morgage loan?

Yeah quite a few, I have working pretty hard the last year staying current, cleaning up the report etc, and have gotten score up from the mid 400's to 620 mid. But 13-24 dont look that great. I also 1.5 years of clean rental history but here is the darker side: 30 days: 6 60 days: 1 90 days: 6 120 days: 9.

Message 5 of 6
ShanetheMortgageMan
Super Contributor

Re: What do we need for a morgage loan?

Well 13-24 months out isn't SUPPOSED to be looked at by FHA lenders, but lender overlay guidelines are starting to consider the 13-24 month credit history as well.  I notice negatives within 1.5 years are given more weight than negatives between 1.5 & 2 years, as soon as you'd have 12 months of clean credit history, assuming you'd be ready, I'd seek out a lender to get pre-approved and see where that goes.  Always are free to come here and get follow up advice if guidelines have changed, etc.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 6 of 6
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