help first time buyer

[Anonymous]

me and my wife are planning on buying a home in california. The house we chose is $390000. We are planning on buying it in feb-march of 2009. We will have about $50000 as the down payment. With the taxes and pmi i looked up on bankrate.com the mortgage will be around $3200. Me and my wife make about $8000 a month before taxes. We have no credit card debt, 2 car payments equal $600, I dont know what else is gets added. I talked to a loan officer and he said that is all they need as far as debt. My wife credit scores are 680, 709, 694. She had 2 collections that were 4 years old and all paid off. I had a bk that is was done 5 months ago. I am not gonna be on the loan just my salary will be on it. So the question is will we qualify for the loan. thanks in advance.

[Anonymous]

I thought in order to use one's income for loan purposes, one must be on the loan along with one's debt.

Front end DTI around 40% given $8k/mo inc and $3.2k/mo mortgage obligation

Back end DTI around 48% given $8k/mo inc and $3.68k/mo total debt obligation

Message Edited by realworldknowledge on 07-23-2008 12:51 PM

Message Edited by realworldknowledge on 07-23-2008 12:59 PM

[Anonymous]

the loan officer that i talked to said that the income can be added just not the name. I dont know if that is possible but the house i am looking at he is the main financial guy so im assuming he is correct but i dont know.

[Anonymous]

Shane will chime in soon.  He is familiar with CA and what they will allow.

[ShanetheMortgageMan]

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biglearner wrote:
me and my wife are planning on buying a home in california. The house we chose is $390000. We are planning on buying it in feb-march of 2009. We will have about $50000 as the down payment. With the taxes and pmi i looked up on bankrate.com the mortgage will be around $3200. Me and my wife make about $8000 a month before taxes. We have no credit card debt, 2 car payments equal $600, I dont know what else is gets added. I talked to a loan officer and he said that is all they need as far as debt. My wife credit scores are 680, 709, 694. She had 2 collections that were 4 years old and all paid off. I had a bk that is was done 5 months ago. I am not gonna be on the loan just my salary will be on it. So the question is will we qualify for the loan. thanks in advance.

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Yup, like RWK said, in order for your income you need to be on the application.  The loan officer you spoke with is probably either new, or, I hope not but might be trying to do loan fraud by stating your wife's income as the total of you and your wife's income.

Also, on a $390k sales price with $50k down, on a 30-year fixed your monthly payment should be closer to $2,700-$2,800 including property taxes, homeowners insurance & PMI.

How does the $8k/mo of income break down between you and your wife?  Are the car payments of $600/mo on both you and your wife's credit or is one on one and the other on the other?  If they are broken up, who has what amount of car payment on their credit report?

What Ch was your BK and when was it filed?

[Anonymous]

it was ch 7 done in feb of 08. both cars are under my wifes name. we have 3 cc under her name all with zero balance. salary wise i make 6000 and my wife makes 2000 gross.

[ShanetheMortgageMan]

While you'll likely be able to afford the housing payment, unfortunately there is no way you can qualify for the home right now.... your wife's debt to income ratio is over 100%, meaning that the monthly payments on the house + the cars exceeds what her gross income is.   I am almost convinced that this loan officer is trying to commit fraud to get you into the home, there aren't as many buyers these days so loan officers who are of poor moral character will do just about anything to get a potential home buyer into a home.  I hope I'm wrong and there is a magical program that will enable your income to qualify but your credit to not be considered, but I wouldn't bet my worst enemies life on it.

[Anonymous]

Shane-

In order for them to qualify, what do they need to do? or how long do they need to wait?- might be the better question? (FHA)

[ShanetheMortgageMan]

With a Ch 7 FHA requires 2 years from the BK discharge... however if the BK was due to extenuating circumstances (i.e. illness, medical bills which piled up, prolonged unemployment due to a downturn in the economy, death of a primary wage-earner, etc.) then an elapsed period of less than 24 months, but no less than 12 months, can be acceptable for FHA provided there have been absolutley no new negatives on credit since and credit has been re-established (usually documented by 3 new trade lines at 12 months each).

Freddie Mac will need 2 years from the discharge date on the Ch 7, and Fannie Mae will need 2 years from the filing of a Ch 7 and the BK must also be discharged.

USDA could be another option if you are looking to live in a rural area, but requires the same amount of time on the BK (2 years).