topic Re: Our Journey to Home Ownership in Mortgage Loans

Our Journey to Home Ownership

andemalia — Fri, 17 Oct 2014 22:04:14 GMT

Hello All,

Just sharing and documenting the process. It might be helpful for someone else.

Here is a brief summary of the situation:

My credit score as of today EXP 651 TU 644 EQ 654

Last delinquency is paid apartment collection from December 2012

Multiple charge-offs, paid collection lates from mostly from 2010 and earlier.

5 credit cards with 0 balance except one card that $542/$1000 (I pay about $150 every month)

1 car loan at just under $7000 with Cap1

Multiple student loans at about $25k all is deferrment as I am in school

Currently make $54k. I have been at my job for 3months, was at my previous job for over 2 years with a lower but gradually increasing income. No gaps in employment.

Single income-earning home. I'm married with a baby boy so household size is 3.

Currently renting at over $1500/month.

Looking for a home in Frederick, Montgomery or PG counties in the greater DC area (SFH are in the $400s and up so looking for a townhome).

No assets, little savings.

We just contacted a lender today with whom we have kin of exploring options. We're doing prequals just for the sake of finding out numbers and potential obstacles. We will work on pre-approval as soon as we have the results from pre-qual (we know it doesn't mean much but for us it's a start).

Potential obstacles:

- very little cash

- 2 disputes comments on credit which will certainly need to be removed

- did not get our ducks in a row as far as our bank statements. We can kind of anticipate what will need to be explained

We should have feedback on Monday.

Re: Our Journey to Home Ownership

Movin_on_up — Fri, 17 Oct 2014 22:09:45 GMT

Best of luck! I'm starting the process myself. ( http://ficoforums.myfico.com/t5/Mortgage-Loans/Ready-to-take-the-leap-Advice-needed/td-p/3534577 )

Look forward to reading more!

Re: Our Journey to Home Ownership

Score_Raiser_T — Fri, 17 Oct 2014 23:32:12 GMT

Good luck. Keep us posted

Re: Our Journey to Home Ownership

andemalia — Sat, 18 Oct 2014 20:59:34 GMT

Movin_on_up and Score_Raiser_T

Will try to update as much as I can. We are trying not to get our hopes high but at the same time trying to think positive!! We need a house, rent is a budget killer!! We will very likely be using some of the state and county programs around. We have been rebuilding our credit for about a year, we wanted to wait until Spring of next year for score over 700s, but the market has been bouncing back up, a home within a reasonable commuting distance (minimum 40-45 mins with no traffic one way) will soon be out of reach if we don't act soon, instead of telling ourselves it can't/won't happen for us...

Re: Our Journey to Home Ownership

andemalia — Wed, 22 Oct 2014 15:50:26 GMT

Update from last week...

We send all documentations in to the lender: W2 and tax returns for 2 years and paystubs for a month; he also checked our credit (654). He says sofar we are pre-qualified for $225k. I actually didn't expect as much, that amount is 4 times our annual income so I don't know... But given that we live in an area where homes are very expensive I ca maybe understand why. Still in that price range, there exactly 3 homes for sale, that need work, one of them with a steep HOA fee; the other one is a 2-level towhnome that would need some updating but kind of liveable; the third one well... ahem... no thanks. But we have to stick to this area because we can qualify to up to $20k in downpayment assistance from the City.

We are looking at what they call MPDU, basically lower priced units, often new construction, you have enter a lottery to be eligible to put an offer on these properties and there is a limited amount of those around. But they are a steal because brand new townhomes priced in the $400-$525k can get bought through the MPDU program for as little as the $150-to $300s range.

All the above reasons are why we decided to start this process early, inventory is very very limited with lots of people looking for homes to buy and many buyers of the homes prices in that range get bought by investors who turn them around for profit.

We could go further, for a longer commute (like 1h30) or in a crappier county with really bad school system but we have a toddler, so that's importnat. Luckily we have plenty of time to patiently look, pray and hope something comes on the market that we like. Our lease is up in June next year... We just can't keep paying over $1500 in rent for another year after the lease is up...

Now I asked the lender why couldn't we move to pre-approval. He just answered that we did not have to worry and that all we needed to do was literally to find a home we like a go from there. I don't know whether that's due to the fact that we are getting the entire downpayment from the city program and basically he would have no "true" assets to verify other than stuff like reserves. He seemed to hint to that. We would only need to pay $450 for appraisal.

I'm still about to gently ask him why we are pre-qualified instead to working on being pre-approved...

Also, we found a good realtor that we are working with... we will see how things go.

Re: Our Journey to Home Ownership

Movin_on_up — Wed, 22 Oct 2014 16:22:34 GMT

Thanks for the update. Sound like you two have a good plan in place!

Re: Our Journey to Home Ownership

andemalia — Sun, 26 Oct 2014 03:30:06 GMT

Thanks for reading Moving On Up!!

Updated Scores: lender pull

andemalia — Sun, 26 Oct 2014 03:33:39 GMT

I just wanted to update the thread with the credit scores pulled by the lender.

Experian: 649 Equifax: 654 Transunion:= 666

Middle score 654

Funny enough, this is exactly what my scorewatch is saying on here. And they did use the 04 version.

Update!

andemalia — Wed, 05 Nov 2014 19:14:36 GMT

Our area is sooo expensive, we have had not luck finding anything in our price range. Many of the options we found needed a lot of work, which would not work with FHA, none were move-in ready.

However, our lender was able to increase our budget to $250k which gives us more options, not a lot but more. We would have had a lot of options if we had decided to look about 30-40 minutes away in the opposite direction as my job. But I already drive about 30 mins with no traffic (which never happens), most times it takes me a minimum of 1 hour to 1h15 to get home. Moving further away would not be a good decision. My job is in Northern Virginia and our budget wouldn't go far over there either.

We are meeting with our realtor for the first time tonight and with another (who urged us to meet with him and compare them according to our needs even though we had told him with were already working with someone) on Monday. I guess we will decide who we ultimately want to go with after we meet him on Monday. There a few homes we are really interested in that are in our new price range although at the very top of our budget.

I will you posted on everything!

Re: Update!

Movin_on_up — Wed, 05 Nov 2014 19:19:17 GMT

Good luck on the with the expanded search. I know stretching the budget can be a challenge at times. I'm trying not to get myself over my head.

Re: Our Journey to Home Ownership

andemalia — Mon, 29 Dec 2014 17:32:01 GMT

Movin_on_up, thnak you my friend!

Updating!!!

There have been a few exciting developments!!!

So I decided to summarize our journey in some sort of a chronologcial order so that you dont have to read all the way down or up (depending on your settings) to get the beginning of the story.

Before October 2014: Spoke with a lender, just to get a general idea of where we are and what we need, sent in some docs but were hesitant to pull the trigger. He didn't seem to really want to help us anyways. He said contact him back when we have some more money in the bank and when we are sure our credit score is better enough that we can justify a hard pull for him to see what it is. I know he was a right in a sense and would he have been more enthusiastic and more supportive, we would have felt more comfortable. I'm glad it turned out that way because we love our current lender!!!

October 17: Opened this thread. Saw a sign on the road with a number, called, didnt like the guy, but he said he worked with someone else in a different office, a different lender, gave us the number, thats how we found our current lender. He is always always pleasant, answers quickly, explains thoroughly and is always excited about his job and about helping us.

We sent in all the docs.

October 22: Lender said we are preapproved for up to $225k. He called it prequalified though and I got so nervous but he said they used interchangeably so it’s actually a preapproval. We will be using a downpayment assistance program that our city offers for first time homebuyers that provides up to $20k for downpayment and closing costs for qualified applicants. Of course they have income restrictions. That limits our search area.

We toyed with the idea of MPDU, which is a first time homebuyer program that enters you in a lottery for a brand new construction (townhome) that you get for about half of its actual value. The price of the home is “controlled” by the city (as well as how much you can resell it if you decide to). Went to the seminars and send docs but its too much bureaucracy, its on the back burner.

October 25: Our scores by lender pull are Experian: 649 Equifax: 654 Transunion:= 666

Middle score 654, exactly what it says here on my fico. They used the 04 version.

November 05: Our preapproval amount was increased to $250k after realizing there was nothing around in a 30-40 mile radius what would be acceptable and pass FHA. 40 miles means over an hour, actually close to an hour and a half in traffic in our DC area. Meeting with a realtor for the first time. It was okay…

November 11: Met with another realtor who really convinced us to work with him instead. It’s a tough world for realtors out there. The first one was a young, timid, petite lady in her early twenties who seemed really nice but over the months (since we have not signed any agreement with her, we haven’t told her we are not using her, simply because she has not found us anything, she says things are slow and she will try after the holidays… felt bad at first but, she really isn’t trying). The new realtor is active, dynamic, always in touch, and doesn’t text us saying “hey”.

December 26: Things got kind of slow and we were started to get a little frustrated mainly because the inventory in our area is so low for our budget. And just when we were getting annoyed, our realtor insisted we pick a couple of homes to go see among the listings even if nothing seemed appealing. That was a great call. One of the homes we saw really grew on us and it is great value for the price. It’s an approved short sale, the bank already took ownership of the home but the sellers still live in there. They are very motivated offering 3%. The home is $265k.

December 28: Put in an offer for $255k, it wont go much lower because its already in the end stages of the short sale process but instead of the 3% we are asking them to reduce the sales price by a similar amount.

Good Faith Estimate put the total amount needed for settlement at $20,000.68. We would need to bring 68 cents to the table!!! We were also preparing earnest money of $1,000.

December 29: Just got word from the lender that we have no reserve requirements which got us soooo excited!!! Just waiting for to hear back about the offer.

Three issues we have identified:

The parking situation. It looks as though we might only have 1 parking spot assigned in front of the home which is a problem. There is also a faint cigarette smell in the home. It’s really faint but it’s there, we would need to find a way to get rid of it. Finally, the 2 full baths upstairs will need redone. The value of the home is $290k says Zillow/Redfin/Trulia… but of course its to take with a grain of salt.

Re: Our Journey to Home Ownership

Anonymous — Tue, 30 Dec 2014 03:20:46 GMT

Congrats!! Thanks for the updates!! Cant wait until Im that far along!!

Re: Our Journey to Home Ownership

Lil_Me — Fri, 02 Jan 2015 18:29:52 GMT

Hello! I am so excited for you and your process. If you don't mind me asking what is the name and number of your lender. I am in the process as well and my story sounds about like yours the only thing is I live on the Eastern Shore of MD.

Re: Our Journey to Home Ownership

andemalia — Sat, 03 Jan 2015 16:59:02 GMT

@Lil_Me wrote:
Hello! I am so excited for you and your process. If you don't mind me asking what is the name and number of your lender. I am in the process as well and my story sounds about like yours the only thing is I live on the Eastern Shore of MD.

Lil_Me,

We love our lender. He is a joy to work with!! I am not sure if I can post his info here though. I'll send you a PM if I can figure out how to do that. The mortgage company is Academy Mortgage based in Greenbelt. I'll send you his name and contact info by PM.

Re: Our Journey to Home Ownership

andemalia — Sat, 03 Jan 2015 17:05:55 GMT

@Anonymous wrote:
Congrats!! Thanks for the updates!! Cant wait until Im that far along!!

firsttimehomebuyer2015,

You will be that far along in no time if you are surrounded by the right players and make wise decisions putting your interest first. We can't believe we are that far along either and frankly, without going too much into our personal situation, if we can do it, so can you!! Read, research, ask, double-check, verify and you will be fine!!

Re: Our Journey to Home Ownership

andemalia — Sat, 03 Jan 2015 17:07:00 GMT

@andemalia wrote:
@Lil_Me wrote:
Hello! I am so excited for you and your process. If you don't mind me asking what is the name and number of your lender. I am in the process as well and my story sounds about like yours the only thing is I live on the Eastern Shore of MD.
Lil_Me,

We love our lender. He is a joy to work with!! I am not sure if I can post his info here though. I'll send you a PM if I can figure out how to do that. The mortgage company is Academy Mortgage based in Greenbelt. I'll send you his name and contact info by PM.

I just PM'ed you his info!

Re: Our Journey to Home Ownership

andemalia — Sat, 03 Jan 2015 17:22:51 GMT

Hello All,

Our offer was accepted yesterday on the short sale and so we are getting it for $255k on a $265k list price. We haven't heard much more from our realtor as soon as we do, we should know more. On paper, we have 10 days to have an inspection done.

In meantime I contacted our city's department in charge of the assistance program, just to establish a line of contact with someone. The lady was really nice and took her time to asnwer my questions. We were able to reserve our assistance funds for the next 6 months. We are now progressively sending docs off the list she gave us, once she gets everything, she will submit it for approval and it should take one to 2 weeks to receive a conditional letter of approval which will be sent to our mortgage lender.

Simultaneously we will start sending documents for the actual mortgage application once we receive the list of docs we need.

So next on our to-do list:

- Gather documents for mortgage application once we get the checklist on Monday, realtor will send ratified offer to lender

- Schedule general inspection and visual lead paint inspection (required by the city to give us the funds, the home was built in 1974)

- Mortgate lender credit score pull, reports from inspection, ratified offer and copy of purchase contract to be sent to the city; in addition they will need some docs from the Title company, then we should be good to go to approval for our assistance funds.

Our fears:

- Inspection reveals something that is too serious for us to handle. The seller doesnt have any money which is why they short-saling in the first place and the bank will not make any repairs, we are buying as in conditioned by inspection and appraisal

- FHA appraisal reveals the home's value lower (in that case we have to come up with the difference or ask the seller's bank to approve a lower price which might take forever if they agree at all) or higher (in which case the seller's bank who will want to mitigate their loss might ask us to pay a higher sales price backed up by appraisal); or the appraiser sees something that makes the home unsafe to live in according to FHA standards which can be litle stuff like doorknobs or light switches I have heard.

Also, we realized we have 2 parking spots in from of the home instead of the 1 we initially thought, so we are good that way. Still need to figure out what to do about the faint cigarette smell and research how we can do a cheap redo of the 2 bathrooms (they are small) so that we can use for the next couple of years until we have enough money to truly remodel.

I will keep you posted, friends!!

Change of plans

andemalia — Thu, 05 Feb 2015 19:46:43 GMT

Hello All,

So much has happened since I last posted. Although the owners of the property we had put an offer on had accepted the offer, the bank took some time to get back to us. In the meantime the loan was sold to another mortgage company and communication just was not happening. Since it's a short sale we decided to back out after the bank decided they were not going to accept less then $285k.

We looked at condos instead since we just were not having any luck finding anything within or budget but then the condos were not FHA approved and the numbers just were not working as far a conventional loan when taking into account the condo fees and our credit.

After not finding anything and not wanting to wait any longer for fear of losing out on the market once people with fuller pockets tha us woke up halfway through the winter, we decided to expand our options to a neighboring county.

We looked at some homes, the put an offer on one then were outbid. Tired and annoyed we went looking at another round of houses and put a full price no conditions offer on a nice newer townhome that is move in ready in an ideal location.

Our offer was accepted on Tuesday and we have the inspection scheduled for this coming Monday...

Type of loan: FHA loan, $265k at 3.5%

Location: Prince George's County, Maryland

So here is a new timeline:

02/01/2015 : Put an offer

02/03: Offer verbally accepted... pending on Redfin YAY!!!

02/04: Offer ratified

02/09: Inspection scheduled

Re: Change of plans

StartingOver10 — Thu, 05 Feb 2015 19:43:45 GMT

Congratulations! Sounds like you made the right move. Short sales are difficult now, at least here in S Florida. The banks are looking for more than market value on many of the short sale properties (that's crazy, right??)!

Getting the townhome that is move in ready sounds like an ideal solution!

Re: Change of plans

frugalQ — Thu, 05 Feb 2015 20:04:01 GMT

congratulations! all of the stresses and let downs makes finding the right house that much more exciting!!