topic Re: is it worth a shot?... in Mortgage Loans

is it worth a shot?...

Anonymous — Sat, 07 Jun 2008 01:55:48 GMT

Hello. Hopefully, someone can help me (Dallas/Shane). My husband and I have been told that FHA takes the lowest score of our two median scores. His median is 579 and mine is 576. I have no lates, but around $4k medical debt in co. Is it worth a shot to apply for FHA with that score? If so, what kind of interest rate would we be looking at? We are only wanting around a $600 payment. Thank you in advance for any input.

Re: is it worth a shot?...

DallasLoanGuy — Sat, 07 Jun 2008 03:17:20 GMT

medical isnt as bad as other collections. but they are still collections.

if you dont use a lot of credit, then certainly one or two baddies can drag your scores down in a hurry. for that reason, i think it may be worth looking at.

sub 580 gets around 7% ish right now. maybe a little more.

$600 payment? i need to know your tax rate in your county/state to derive a purchase price.

solid rental history?

3 good trade lines on the credit report?

2yr continuous job history in the same line of work?

Re: is it worth a shot?...

Anonymous — Sat, 07 Jun 2008 15:53:21 GMT

Hello Dallas. Thanks for your input so soon. I'm unsure as to what the tax rate is where we are (Southeast MO.). We moved from Vegas to here in 6/07, lived w/ his parents for a couple of months, and have been renting the same place we are in now since 8/07 (almost a year). I do in fact have 3 or more positive trade lines (CC, SL, car payment). As far as the job history, when we moved back to Southeast MO. my husband took the first job he could get. The job he is currently in pays twice as much, has worked for the co. since March, however, he has worked in this line of work around 3 to 4 years. Do you think that's acceptable to FHA? Also, our CC are close to being maxed, but we are planning to pay them down to 40%-50% util this next month. FYI- our dti is approx. 29% w/out a mortgage. Thanks again for your input. I really appreciate it.

Re: is it worth a shot?...

DallasLoanGuy — Tue, 10 Jun 2008 02:22:16 GMT

talk to a realtor or get preapproved. tax rate will affect pmt as taxes are escrowed into the payment.

good tradelines have to be 12 months old

same line of work is fine.

if you are maxed on cc, then paying to 50% should get you in 620+ fico land. i think you are in good shape.

Re: is it worth a shot?...

Anonymous — Tue, 10 Jun 2008 02:38:28 GMT

Thank you so much. You have been very encouraging!!!!

Re: is it worth a shot?...

DallasLoanGuy — Tue, 10 Jun 2008 03:04:41 GMT

Good Luck!!

Re: is it worth a shot?...

Anonymous — Fri, 13 Jun 2008 07:00:22 GMT

Ok Dallas. I took your advice and spoke with a realtor that my husband has known for a while (thought she would be more trustworthy than one we didn't know). Anyway, she advised me that we should go ahead and apply with FHA to see where we stand and what we need to fix, etc. before we pay our credit cards down. She said that if we have proof of paying those down (returned checks, confirmation numbers) then that would be fine for the applic. and underwriters to derive an answer. What are your thoughts/suggestions?

Also, our lease ends Aug. 25 (this year) and I wanted your opinion as to when we should apply?. Right away? 30 days after payments posted to cc balances?

I mentioned before that I had med. debt and you replied that it may not be that big of a deal...that debt was reported (collections) in 2007. Have I shot myself in the foot yet? Does FHA normally look past/want an explanation of collections such as this that has been so recent? Do you think or have any experience with FHA wanting those to be paid before approval?

And lastly, what is the difference between a pre-foreclosure and a foreclosure? When a house that has been foreclosed on has a list price of 89,900, does that mean that is the bottom dollar that the lender is willing to sell the property for or is it only what the homeowner owes on it? Is this price negotiable? ............ Does FHA even approve foreclosures?....I've been told (and read) yes and no. I'm so confused now........

I am so sorry to have rattled all of this off to you, but I'm a first-time buyer and have a ton of questions. Its made it difficult for my husband and I to get a straight answer from anyone except you. Thanks again for any input.....

Re: is it worth a shot?...

DallasLoanGuy — Fri, 13 Jun 2008 13:51:45 GMT

kellikis wrote:
Ok Dallas. I took your advice and spoke with a realtor that my husband has known for a while (thought she would be more trustworthy than one we didn't know). Anyway, she advised me that we should go ahead and apply with FHA to see where we stand and what we need to fix, etc. before we pay our credit cards down. She said that if we have proof of paying those down (returned checks, confirmation numbers) then that would be fine for the applic. and underwriters to derive an answer. What are your thoughts/suggestions?

Also, our lease ends Aug. 25 (this year) and I wanted your opinion as to when we should apply?. Right away? 30 days after payments posted to cc balances? I always suggest that you apply sooner than later. That way the loan officer has time to help you dress up anything that needs attention.

I mentioned before that I had med. debt and you replied that it may not be that big of a deal...that debt was reported (collections) in 2007. Have I shot myself in the foot yet? maybe not Does FHA normally look past/want an explanation of collections such as this that has been so recent? sometimes they want explanation Do you think or have any experience with FHA wanting those to be paid before approval? i have never asked a client to pay off collections. some lenders are starting to ask that you do.... if they do, get another lender

And lastly, what is the difference between a pre-foreclosure and a foreclosure? pre-foreclosure means that it is IN foreclosure and not foreclosed yet When a house that has been foreclosed on has a list price of 89,900, does that mean that is the bottom dollar that the lender is willing to sell the property for or is it only what the homeowner owes on it? Is this price negotiable? yes, sometimes the bank will take less to move it off the books quickly. banks are bad realtors, LOL. your realtor will have to guide you............ Does FHA even approve foreclosures? yep, i do them all of the time....I've been told (and read) yes and no. I'm so confused now........ the only problem would be if the appraiser notes some things that fha wont approve(exposed wood, wood touching dirt, foundation issues, ect) and seller wont fix them

I am so sorry to have rattled all of this off to you, but I'm a first-time buyer and have a ton of questions. Its made it difficult for my husband and I to get a straight answer from anyone except you. Thanks again for any input..... you are welcome.

remember, my answers are generic in nature. every situation is different

Re: is it worth a shot?...

Anonymous — Sat, 14 Jun 2008 15:30:16 GMT

Hi Dallas. Have more questions for you. ....My husband went to a local bank yesterday and applied for a USDA rural mortgage loan. DENIED because of an installment loan that has horrible payment history which is only showing up on EQX. We have managed to pay the loan down from $25k to $4700 with the past 2 mths being on time. He has a separate c/o (10k) that only reports to TU & TU is his mid score (592). Both the charge off & installment loan w/ derogatory history, are remaining balances from equipment purchases.

**** These debts were due to a loss of contract (business venture) after Hurricane Katrina (New Orleans). ***

...so here are my questions....

1. Does FHA use the lower of our two median scores only as a qualifying criteria?

2. Once qualified, will all 3 CR for both spouses be pulled, or can you explain how this works? We keep getting the runaround.

--My mid score is 576 (probably higher since I paid down a cc to 50%) and is the lower of our two median scores. If my score of 576 qualifies us, and they use my CR, then that is what we are hoping will happen.

3. If FHA does look at all 3 CR for both of us, then will an explanation of the failed business attempt be acceptable & looked at as a one-time event?

4. With all of this being said, do you recommend we go ahead and apply for FHA, or should we wait in order to show better payment history on that installment loan? If you think we should wait, how long? What is your opinion?

By the way, since you're obviously the type of loan officer we want to work with, can we work with you (We're in Missouri) ? LOL....

Re: is it worth a shot?...

DallasLoanGuy — Sat, 14 Jun 2008 16:41:07 GMT

kellikis wrote:
Hi Dallas. Have more questions for you. ....My husband went to a local bank yesterday and applied for a USDA rural mortgage loan. DENIED because of an installment loan that has horrible payment history which is only showing up on EQX. We have managed to pay the loan down from $25k to $4700 with the past 2 mths being on time. He has a separate c/o (10k) that only reports to TU & TU is his mid score (592). Both the charge off & installment loan w/ derogatory history, are remaining balances from equipment purchases.
**** These debts were due to a loss of contract (business venture) after Hurricane Katrina (New Orleans). ***

...so here are my questions....

1. Does FHA use the lower of our two median scores only as a qualifying criteria? all scores are used in qualifying. lowest middle for pricing.

2. Once qualified, will all 3 CR for both spouses be pulled yes, or can you explain how this works? We keep getting the runaround.

--My mid score is 576 (probably higher since I paid down a cc to 50%) and is the lower of our two median scores. If my score of 576 qualifies us, and they use my CR, then that is what we are hoping will happen.

3. If FHA does look at all 3 CR for both of us, then will an explanation of the failed business attempt be acceptable & looked at as a one-time event? it can be considered a one-time event. and may not kill the deal. the recent lates concern me the most

4. With all of this being said, do you recommend we go ahead and apply for FHA, or should we wait in order to show better payment history on that installment loan? If you think we should wait, how long? What is your opinion? hard to say. with other solid credit, you might be ok. but the recent lates concern me

By the way, since you're obviously the type of loan officer we want to work with, can we work with you (We're in Missouri) ? LOL.... LOL.... maybe. or i can refer you to a good loan officer that lends there.

time will help you. but if your really want to try now, then go ahead.

dont get your hopes up.... with the recent lates.

the good news is: the loan officer can tell you exactly what you need to do to qualify in a short time.

have all the credit cards updated lower balances on the credit report?

Re: is it worth a shot?...

Anonymous — Sun, 15 Jun 2008 00:04:07 GMT

Well, I looked over both of our CRs (all 3). The good news is that I don't have any lates on tu or xp in the last 12mths, but eqx shows a few with the last being 5/07. The worst part is that my husband's most recent late is 4/08 with that installment loan. Isn't it true that FHA doesn't want any lates in the past 12mths? or 2yrs?

Re: is it worth a shot?...

DallasLoanGuy — Sun, 15 Jun 2008 01:56:12 GMT

kellikis wrote:
Well, I looked over both of our CRs (all 3). The good news is that I don't have any lates on tu or xp in the last 12mths, but eqx shows a few with the last being 5/07. The worst part is that my husband's most recent late is 4/08 with that installment loan. Isn't it true that FHA doesn't want any lates in the past 12mths? or 2yrs?

if manual underwrite, it is almost impossible to get a loan with lates in the last 12 months

if approved thru automated underwriting, it doesnt matter

Re: is it worth a shot?...

Anonymous — Sun, 15 Jun 2008 05:47:46 GMT

I don't think I follow. Are you saying that if we find a lender that does automated underwriting instead of manual underwriting there may be a chance of getting approved? If so, I'd like to know whom that may be. I'm new to this ballgame and unsure of the lingo and process of things.

For the most part I believe we need to wait for a while before we apply to allow time to help us out. Of course, if there's a way to get it done, I'm all about getting that approval. So, if there is a slight chance, I'm willing to take it........your thoughts????

Re: is it worth a shot?...

DallasLoanGuy — Sun, 15 Jun 2008 21:50:04 GMT

kellikis wrote:
I don't think I follow. Are you saying that if we find a lender that does automated underwriting instead of manual underwriting there may be a chance of getting approved? If so, I'd like to know whom that may be. I'm new to this ballgame and unsure of the lingo and process of things.

For the most part I believe we need to wait for a while before we apply to allow time to help us out. Of course, if there's a way to get it done, I'm all about getting that approval. So, if there is a slight chance, I'm willing to take it........your thoughts????

lenders will run your file thru automated underwriting. if it approves you, you are good to go.

automated doesnt deny loans... it 'refers' them to manual underwrite(done the old fashioned way, by hand).

manual underwriter ill not approve with recent lates.

yes, time will help. it doesnt urt to apply and see if you get automated approval. if it gets 'refered' then the loan officer will basically say that you have been denied.... becaus you will not get approval manually.

Re: is it worth a shot?...

Anonymous — Mon, 16 Jun 2008 19:13:53 GMT

Ok. I understand now. So here's another question for ya.

I realize that there is no real chance of getting approved automated, and definitely not manual, so when we do apply, who would you recommend we use? We're located in Southeast Missouri.

Also, if we plan on applying in 10 mths or so, what would you anticipate the interest rates being?

Again, I want to thank you for being so punctual with your replies and answering all of my questions honestly. Should be more lo's like you around....thanks again Dallas!!!

Re: is it worth a shot?...

MichiganMommy — Mon, 16 Jun 2008 21:10:18 GMT

DallasLoanGuy,

Clarification, are you saying you have never seen FHA appove with 12 month lates. Even if you have a rock solid explanation and that is given to the manual underwriters??? If that is the case, why have they had my file for over a month now? Seems like they would have come back and told me NO by now. This is so frustrating!!!

Thanks

Re: is it worth a shot?...

DallasLoanGuy — Tue, 17 Jun 2008 03:56:11 GMT

kellikis wrote:
Ok. I understand now. So here's another question for ya.
I realize that there is no real chance of getting approved automated, and definitely not manual, so when we do apply, who would you recommend we use? We're located in Southeast Missouri. ask me in a few months.

Also, if we plan on applying in 10 mths or so, what would you anticipate the interest rates being? noone knows that.

Again, I want to thank you for being so punctual with your replies and answering all of my questions honestly. Should be more lo's like you around....thanks again Dallas!!!

you are welcome. i hope i helped.

remember.... this is a discussion board and things fly around pretty fast. if you want 100% solid asnwers, then you need to have a full loan ap and credit in front of a prof loan officer.

Re: is it worth a shot?...

DallasLoanGuy — Tue, 17 Jun 2008 04:00:39 GMT

MichiganMommy wrote:
DallasLoanGuy,

Clarification, are you saying you have never seen FHA appove with 12 month lates. Even if you have a rock solid explanation and that is given to the manual underwriters??? If that is the case, why have they had my file for over a month now? Seems like they would have come back and told me NO by now. This is so frustrating!!!

Thanks

it can happen that lates in the last 12 months can be overcome.

you have to prove to the underwriter that it is a one time deal that will not re-occur.

thing is... unless you have got some reserves, how can you prove it.

scenario 1: joe gets laid up with appendix and doesnt pay his car note. but has $10K in the savings

scenario 2: john gets laid up with a bad back.... and has $500 in the bank(no savings).... but misses his $40 minimum payment on the credit card.

see a difference?

Re: is it worth a shot?...

southernficoaddict — Wed, 18 Jun 2008 00:37:15 GMT

Why would automated underwriting approve with lates in the last 12 months? Would it be based soley on scores and debt to income ratio?

Re: is it worth a shot?...

DallasLoanGuy — Wed, 18 Jun 2008 01:04:59 GMT

southernficoaddict wrote:
Why would automated underwriting approve with lates in the last 12 months? Would it be based soley on scores and debt to income ratio?

it is based on everything on the loan ap

score

dti

length of employ

savings/retirement

ect

it can approve you in the last 12 months. it reads a credit report pretty well... credit reports tell a story if you listen.

like my scenario above... joe & john. one guy would probably get approved and the other not