topic Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :) in Mortgage Loans

Planning To Purchase Home, Advice Is Highly Welcomed!! :)

iamkeithj — Thu, 15 May 2014 00:32:22 GMT

So here is my current situation.... I just recently purchased score watch and my experian score from myfico. My equifax reads 699 and my experian reads a 750 fico score. I was just recently approved for nfcu cash rewards visa sig with a 12.5k limit and I would like to go through them for a mortgage loan. I don't plan on opening any new credit until after I close on a home. I'm currently renting and my lease ends up in November. That leaves me 6 months to get in a new home. Is this enough time?? Should I apply or aim for higher scores? Should I go through a pre-approval first? im looking to purchase a home between 120000 Min and 160000 max. Is this able to be done with a 50k income along with my fico scores? What would the first step in planning to get in new home by the time my rental lease ends?

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

Anonymous — Thu, 15 May 2014 00:49:13 GMT

What are your monthly debt payment? Qualifications depends greatly on debt to income ratios

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

ethan17debttackler — Thu, 15 May 2014 01:02:53 GMT

@Anonymous wrote:
What are your monthly debt payment? Qualifications depends greatly on debt to income ratios

Debt to income ratio plays a BIG part in getting pre-qual'd. I make about the same you do and was pre-qual'd for $240k or so (I have quite a bit of SL i'm paying on still).

So, with your numbers, it's doable. Now, you just have to factor in debt-to-income ratio, time at job (at least 2 years), etc.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

iamkeithj — Thu, 15 May 2014 01:21:10 GMT

With car loan 360/m rent 765/m and credit cards around 150/m it comes to 1275/m

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

ethan17debttackler — Thu, 15 May 2014 01:33:59 GMT

If that's all the debt you have, you should be in good shape for a $125-$160k loan (you can possibly even double up because of good DTI). However, time at current job, AAoA, recent baddies, etc. play a role too. Search this forum to see what more seasoned buyers (& mortgage lenders) have said.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

ethan17debttackler — Thu, 15 May 2014 01:35:51 GMT

Oh, and of course, you've got to have a $$ for a solid down payment ready to go....

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

iamkeithj — Thu, 15 May 2014 01:48:58 GMT

Ok thanks to all you guys for all the valuable info!! Much appreciated. I was wondering will the new credit line affect my score? I know it will help with util but my oldest credit card is 2 years and I'm worried it may affect my aaoa which may lower my score... Oh and I have no baddies and 5 years with same company

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

ethan17debttackler — Sun, 18 May 2014 06:06:34 GMT

@iamkeithj wrote:
Ok thanks to all you guys for all the valuable info!! Much appreciated. I was wondering will the new credit line affect my score? I know it will help with util but my oldest credit card is 2 years and I'm worried it may affect my aaoa which may lower my score... Oh and I have no baddies and 5 years with same company

Your numbers look pretty good. You should speak with a loan broker and get pre-qual'd. As far as credit line, you're talking about the mortgage loan, right? If so, yes it will affect your score. In the long run, though, mortgage loan beats any installment & revolving loan.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

iamkeithj — Sun, 18 May 2014 19:36:37 GMT

Thanks I will go for pre approval. As for credit line I was referring to my new credit card from NFCU.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

MaddMatter70 — Sun, 18 May 2014 20:33:43 GMT

Down payment savings would be your next big step I think. If you are going FHA and you want to use the lower down payment requirement your looking at $5600.00 in the bank two months before you apply plus closing costs. The DP is 3.5% If you are able to ask the seller for closing concessions then that would suffice with FHA but if not that will be another 2500-5500 depending on a lot of stuff. Conventional is good with your numbers too but your mid score will be what they use, so if it's 700r higher you'd be able to do a 5% down and I have heard that if your mid score is 720 or higher sometimes 100% LTV is coming back in the form of 80/20 loans but you would probably have to do 100% of the closing costs. Talk with a broker earlier rather than later. They will run your numbers for your area and their products and give you a real solid idea of where you stand. I am going through it FHA and the only thing I wish is we would have saved more sooner. The seasoning of the assets is the kicker. They go back two or three months into your accounts.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

iamkeithj — Sun, 18 May 2014 20:38:35 GMT

I have about 2k in savings and a little over 10k in 401k that I plan on using in addition to the down payment. I can borrow up to 5k for a home. I know it's not much but I'm 25 and this will be my first home. With 5k is it enough to cover costs in getting into a home? Or will I need to save more. I can save another 3 to 5k by November when my rental lease ends.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

MaddMatter70 — Sun, 18 May 2014 20:43:46 GMT

Just my experience here not an expert at all. The more you can save the better. You can use the loan from the 401k, but that is the only type of loan they will allow. I say from what you said you look pretty good at a total of about 8k. I would if I were you process the loan now, put it in a 6mo money market or something and use it that way, You will be sittin real pretty then.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

MaddMatter70 — Sun, 18 May 2014 20:45:51 GMT

By the way again just my humble opinion but very good thinking at 25.

Re: Planning To Purchase Home, Advice Is Highly Welcomed!! :)

iamkeithj — Sun, 18 May 2014 20:50:58 GMT

Thanks Madd! Some very good info and definately taken into consideration. Looking into that now...