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Which type of mortgage loan would be best for me?

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maurita
Valued Member

Which type of mortgage loan would be best for me?

Hello everyone. I signed a contract for a new home build back in August 2015. My closing was supposed to be on March 27 due to alot of unforseen issues I haven't closed.

I am self employeed with a income of $50000 for 2014 and $72000 for 2015. I am also putting my mom on the loan as a co borrower. Her Social Security income is $17880. I have had alor of

health problems within the last year which led to alot of credit card debt. Total unpaid debt is $20303. The price of the house is $329320. Problem is I owe taxes for 2014 $10000 and $17000 for 2015. I am on a payment plan for 2014. I pay $200 a month. I owe so much because I didn't claim any of my deductions. In order to show a larger income. My plan was to go back and amend both years once I had closed on the house. I have enough deductions that I shouldn't have to owe very much at all. Will I be able to use my 2015 income since I owe IRS, if so what are my other options, could I call to include 2015 into the existing payment plan. My other credit card obligations are $424 a month, If I can use both years I should be fine. If not what would my other options be? My scores are in rhe low 700's and my mid score is 698.I was wanting to go conventional. with 3% down if possible. We gave $10,000 at contract so that would be the 3% down. I had initially gone with one lender who had promised they could do 3% down, lender paid PMI and no closing cost. Ended wasting time since they came back that they would need 5% down, closing and they could do lender PMI. I had gotten a conditionally apptoved. However, they wanted me to pay several of my other accounts off which is impossible right at this morment and closing cost and the remaining down was nearly $14000.00. I like many of us here just recently started repairing my credit. I messed up during my college years. Applied for too many credit cards and took out student loans that I still have not gotten around to repaying yet. I have to call and arrange repayment for that in the near future. I graduated in 2001. My question is with the outstanding Federal student loan debt am I only stuck with Conventional as a mortgage option? I know FHA offers a higher DTI. None of the student

loan is showing on my credir reports. No liens or charge offs. My fear is if I try to apply for something other then Conventional will the  outstanding loans pop up when it goes to underwriting?

 

 

 


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Message 1 of 5
4 REPLIES 4
Anonymous
Not applicable

Re: Which type of mortgage loan would be best for me?

Following
Message 2 of 5
StartingOver10
Moderator Emerita

Re: Which type of mortgage loan would be best for me?


@maurita wrote:

Hello everyone. I signed a contract for a new home build back in August 2015. My closing was supposed to be on March 27 due to alot of unforseen issues I haven't closed.

I am self employeed with a income of $50000 for 2014 and $72000 for 2015. I am also putting my mom on the loan as a co borrower. Her Social Security income is $17880. I have had alor of

health problems within the last year which led to alot of credit card debt. Total unpaid debt is $20303. The price of the house is $329320. Problem is I owe taxes for 2014 $10000 and $17000 for 2015. I am on a payment plan for 2014. I pay $200 a month. I owe so much because I didn't claim any of my deductions. In order to show a larger income. My plan was to go back and amend both years once I had closed on the house. I have enough deductions that I shouldn't have to owe very much at all. Will I be able to use my 2015 income since I owe IRS, if so what are my other options, could I call to include 2015 into the existing payment plan. My other credit card obligations are $424 a month, If I can use both years I should be fine. If not what would my other options be? My scores are in rhe low 700's and my mid score is 698.I was wanting to go conventional. with 3% down if possible. We gave $10,000 at contract so that would be the 3% down. I had initially gone with one lender who had promised they could do 3% down, lender paid PMI and no closing cost. Ended wasting time since they came back that they would need 5% down, closing and they could do lender PMI. I had gotten a conditionally apptoved. However, they wanted me to pay several of my other accounts off which is impossible right at this morment and closing cost and the remaining down was nearly $14000.00. I like many of us here just recently started repairing my credit. I messed up during my college years. Applied for too many credit cards and took out student loans that I still have not gotten around to repaying yet. I have to call and arrange repayment for that in the near future. I graduated in 2001. My question is with the outstanding Federal student loan debt am I only stuck with Conventional as a mortgage option? I know FHA offers a higher DTI. None of the student

loan is showing on my credir reports. No liens or charge offs. My fear is if I try to apply for something other then Conventional will the  outstanding loans pop up when it goes to underwriting?

 

 

 


My post is meant to get you to look at your situation.  It will sound harsh. I am sorry for the frank assessment, but you need to stop doing what you are doing.  

 

Looking at your post, it looks like you aren't quite ready for a mortgage.  The red flags are this:

 

  • Unpaid IRS debt that is accumulating (another year outside of your payment plan).  
  • Check your IRS payment plan agreement. I am pretty sure you have to keep up with the taxes subsequent to the payment plan. 
  • Unpaid student loans
  • Raise but simultaneous run up of debt while the house is under construction

Call your LO and ask specifically why you are ineligible for FHA (probably unpaid student loans???). 

 

The very scary part of your post is the plan you have in place to amend your tax returns because you would not be able to qualify for the mortgage with your actual income after your business expenses even with the substantial raise you received this year from $50k to $72k.  This alone is mortgage fraud (showing a different income to the lender than the federal government. Knowing you are going to reduce your income after closing is the issue)

 

Buying a home is more than just qualifying for the mortgage on the front end.  It is being able to actually afford the monthly payments and normal maintenance and repairs. 

 

From your post you were offered a very good alternative that you were unable to accept because you would have an additional $14k to bring to closing over the $10k deposit you have with the builder on a $329k purchase.  There were conditions to get that loan that you said you could not meet (pay off of outstanding debt). This is an indicator that you are currently drowning in debt and adding the house payment will be very harmful to your overall finances (based on your post).  This does not mean you won't be ready for a home in the future, just that you aren't prepared now. 

 

PS:  the 3% conventional loan has higher closing costs (usually) and higher PMI.  Have your LO compare the loan products so you can see for yourself

Message 3 of 5
Anonymous
Not applicable

Re: Which type of mortgage loan would be best for me?

Hi there, I am also planning for a mortgage loan. Next week I am planning to move my new house and while discussing with my friend, he suggested me (link removed by mod) who provides a service of moving and mortgage loan. I want a loan for my home renovation work. Is it a good option for me? If you have more suggestions, please tell me.

Message 4 of 5
StartingOver10
Moderator Emerita

Re: Which type of mortgage loan would be best for me?

danenorris - please review our terms and conditions before including a link. Ads are not allowed in the post without prior permission by Admin.

Message 5 of 5
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