Would I qualify for a mortgage now?

[Anonymous]

Unique situation. I am a self employed professional making 400k verified self-employed income before taxes. Looking at a 700k mortgage for a high end condo in FL. Living expenses are minimal @ 2k a month. Just paid off all government student loans and am completely debt free and will start saving for 20% downpayment.

I got divorced 6 years ago which has wreaked havoc on my credit. FICO is around 630 now after quality credit repair service. I had private student loans and CC debt that I put on my name to take out for ex's schooling while we were in school. I made decision to not pay for her debt and now it is all out of statue of limitations but still reporting. There are 5-6 charge offs ranging from a 3k CC debt to about 35k in private student loans for a total of about 60k. Never been sued, no judgments, no bankruptcies or public information, no lates since 2010.

I refuse to pay for her debts and it is out of SOL. Will I qualify for a good interest rate without having to wait for 2018 (some private lenders are reporting dates inaccurately) until everything drops off in it's entirety. Mortgage will only be on my name with my credit.

I have 70k in retirement and am on the deed of a fully paid for property with my parents with a value of 240k

Would I qualify now with any lenders?

[Anonymous]

No one?

[Anonymous]

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@Anonymous wrote:
No one?

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It is Sunday night so the board is usally slow during the weekends.  With that being said, lenders don't use FICO 08 for mortgages.  The scores used are EQ 04, EX 98, TU 04.

You can find out what they are by buying the 3B report of here.  Assuming they are in the 600s, you can go the FHA route but bear in mind the highest FHA loan limit is $630,000 or lower for FL and is dependable on your location.

http://www.fha.com/lending_limits_state?state=FLORIDA

[Anonymous]

Thanks for the reply but the FHA limits are too low for my needs in Miami.  I am asking to qualify for a conventional mortgage at a rate close to prime as I see it on bankrate.com for a 30 year conventional fixed.

[dragontears]

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@Anonymous wrote:
@Anonymous situation. I am a self employed professional making 400k verified self-employed income before taxes. Looking at a 700k mortgage for a high end condo in FL. Living expenses are minimal @ 2k a month. Just paid off all government student loans and am completely debt free and will start saving for 20% downpayment.

I got divorced 6 years ago which has wreaked havoc on my credit. FICO is around 630 now after quality credit repair service. I had private student loans and CC debt that I put on my name to take out for ex's schooling while we were in school. I made decision to not pay for her debt and now it is all out of statue of limitations but still reporting. There are 5-6 charge offs ranging from a 3k CC debt to about 35k in private student loans for a total of about 60k. Never been sued, no judgments, no bankruptcies or public information, no lates since 2010.

I refuse to pay for her debts and it is out of SOL. Will I qualify for a good interest rate without having to wait for 2018 (some private lenders are reporting dates inaccurately) until everything drops off in it's entirety. Mortgage will only be on my name with my credit.

I have 70k in retirement and am on the deed of a fully paid for property with my parents with a value of 240k

Would I qualify now with any lenders?

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Assuming 630 is actually your mid mortgage score and you are going for a jumbo loan I seriously doubt you will get the best rates (i.e. the ones listed on most sites), whether you will get a rate you think is good enough is hard to tell from the information provided. At least with 20% down you won't have the extremely high PMI that would come with that score.

the other consideration is on your credit report you have 60k of bad unpaid debt, you may run into issues with lenders over this

Disclaimer: I am not a lender and have never applied for a jumbo mortgage

[Anonymous]

Thanks, I would potentially qualify for a "doctor's mortgage" as well with higher rates but no PMI with no downpayment, but I don't think my credit score is high enough for that.

[jamie123]

How long will it take for you to save the 20% down payment?

2018 is really just 18 months down the road and by having a spotlessly clean credit report with that size mortgage you will save yourself tens of thousands of dollars in interest by getting the best possible rate.

And listen...

I really don't care how much you make but isn't a $700K condo a bit much for a first home?

I mean I just ran the numbers and this is what I found:

$700K price with 20% down payment = $560K mortgage at 6%

After making 4 years of payments you will have paid $130K in interest and would still have a princpal balance of $530K

I know Miami is one of the high rent districts in the country but don't you think something along the lines of $400K or $500K would make better sense right now? If you really do maintain your sucess, in a few years you could buy a $1 million dollar home and pay cash for it.

[Anonymous]

I would start saving on July 1 which is when I will have paid off all my student loans.  360k at 7.3% was no fun. I am funneling 95% of income into that right now. It would take me about 4.5 months to save the downpayment as I live on 2k a month and can defer estimated taxes for a quarter.  No, I do not think 700k is too much as the mortgage itself would be 560k after the downpayment.  That is $2600 a month at 3.8% interest making my housing costs 7.42% of my pretax earnings.  There is now way I would accept a mortgage interest rate higher than 4%.  6% is ludicrous.  If I cannot get less than 4% now I would wait the 18 months or buy cash.  Are you suggesting I would likely not qualify for 4% and under at this point in the game?

[dragontears]

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@Anonymous wrote:

I would start saving on July 1 which is when I will have paid off all my student loans.  360k at 7.3% was no fun. I am funneling 95% of income into that right now. It would take me about 4.5 months to save the downpayment as I live on 2k a month and can defer estimated taxes for a quarter.  No, I do not think 700k is too much as the mortgage itself would be 560k after the downpayment.  That is $2600 a month at 3.8% interest making my housing costs 7.42% of my pretax earnings.  There is now way I would accept a mortgage interest rate higher than 4%.  6% is ludicrous.  If I cannot get less than 4% now I would wait the 18 months or buy cash.  Are you suggesting I would likely not qualify for 4% and under at this point in the game?

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A quick search has interest rate for a 630 score at 4.88% for a 30 year fixed (not jumbo). For conventional loans the interest rate is tightly tied to your score, the higher your score the better rate. to get under 4% you will likely need a mid mortgage score of 720, which is why a FHA was suggested to you earlier since the interest rate is not tied to your score as much.

On a side note, I don't see an issue wanting a house that is equivalent to 1 years income, when I bought my house it was equivalent to 2 years income for me.

[Anonymous]

I would think your payment would be more than $2600/month on a 560k loan. I was quoted just under $2200/month on a 340k loan.