Will living with family pose an issue with Mortgage approval?

[ktb524]

My wife and I sold our home last year but were upside down when we sold. We've been living with family to pay off the debt incurred from selling. We will be out of the red in a few months and will start saving for another home. Our Fico scores right now are in the 720's and 730's and will only improve going fwd. My question is that for a conventional loan or even FHA will it matter if we have nothing to show for rent for 2 years? Prior to this we had a mortgage that was never late for 7.5 yrs but not sure if that is even taken into consideration since it will be at least 2 years without a mortgage by that time.

[StartingOver10]

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@ktb524 wrote:

My wife and I sold our home last year but were upside down when we sold. We've been living with family to pay off the debt incurred from selling. We will be out of the red in a few months and will start saving for another home. Our Fico scores right now are in the 720's and 730's and will only improve going fwd. My question is that for a conventional loan or even FHA will it matter if we have nothing to show for rent for 2 years? Prior to this we had a mortgage that was never late for 7.5 yrs but not sure if that is even taken into consideration since it will be at least 2 years without a mortgage by that time.

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Did you complete an official short sale with the prior lender or did you bring the difference to closing in cash?

It will make a difference for the answer to your question.  BTW, your prior mortgage counts heavily in your mortgage scores. Are the scores you are quoting above FICO mortgage scores or FICO 8 scores or something else?

[DallasLoanGuy]

verification of rent is not always required.

if they DO REEQUIRE it for some reason, then if you can show you paid down debt or saved a lot while living rent free then you would be ok.

note:  live rent free for 2yrs and saved $5000 wont fly for a $200k mortgage

[ktb524]

We brought cash to the table, the scores are Fico 8 scores. We're trying to have at least 50k in savings before applying for a mortgage. If possible, we'd like to build new so that would give us an additional 6-8 months to save as well. The market is almost outpricing us where we're at (NJ) so we're looking into Lehigh Valley, PA. Who knows if there will be anything in our price range in a year though.

Thanks for the feedback.

[StartingOver10]

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@ktb524 wrote:

We brought cash to the table, the scores are Fico 8 scores. We're trying to have at least 50k in savings before applying for a mortgage. If possible, we'd like to build new so that would give us an additional 6-8 months to save as well. The market is almost outpricing us where we're at (NJ) so we're looking into Lehigh Valley, PA. Who knows if there will be anything in our price range in a year though.

Thanks for the feedback.

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Pull your 3 mortgage scores here so you know at least where you are now. Go to http://www.myfico.com/Products/FICO-Score-3B-Report/