topic Do I Qualify? VA-FHA (203k) in Mortgage Loans

Do I Qualify? VA-FHA (203k)

Anonymous — Wed, 03 Feb 2016 01:26:57 GMT

Good Evening,

Looking to see if after my 2 year waiting period this June would i qualify for FHA 203k or VA loan for the amount of $225 - $250k.

1. Mortgage Credit Scores:

Mid Mortgage 665

2. Credit Negatives: If you have any, what negatives are on your credit reports. For each negative, please provide:

Type: BK7 : Discharged 6/14
Status: Perfect credit since

3. Gross Income. Gross income (before witholdings, medical/dental, 401k contributions), per your IRS tax returns, is what is important when qualifying, not net income.

Full Time Salary Job 1: $63,500
Full Time Salary Job 2: $40,000
Total Income: $103,500

Not sure if salary from Job #2 will be considered from mortgage. The good its full time and salaried, the bad it since Oct. 2015. Please advise

4. Source of income. Where is the income coming from? List each source.

Employment Type (2 Full time Salary Income)

5. Monthly debt payments.

Credit Card Minimums: $25/mth
Student loans:$40,000 with payments of $450/mth

6. Employment (for those who are employed).

Type of employment: Salaried, 2nd Job is also full time Salaried
How long: 9 mths
How long have you been in the industry: 10 years

7. Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).

I expect to have $8,000 in savings

8. Location: This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.

Michigan
Genesse or Wayne County
Detroit or Flint, MI

9. Property Description:

SIngle Family Home

10. Property Value.

Looking for $200-$225K

11. Occupancy.

Primary residence, 1st time homebuyer

12. Transaction Type. Purchase

Re: Do I Qualify? VA-FHA (203k)

CWESTL — Thu, 04 Feb 2016 01:52:19 GMT

I just closed on a 203k loan purchase of my new residence last week. The process was demanding primarily due to all of the involved parties (contractors, etc.) in the process. One issue may be your length with your current employer, and the amount of funds for down payment/closing in your account(s). The possible shortage of down payment/closing funds should be an issue easily overcome via saving additional money. FHA 203k loans require 3.5% down payments, closing cost, 203k inspector/consultant fees, PMI (property mortgage insurance), etc. Cost overrun contingency funds are also escrowed at 15% of the rehab funds. These loans are also a bit more expensive in terms of interest rates. My middle score was 738 which typically garnered a 4% interest rate on a 30 year fixed mortgage, but 203k loans are .5% more expensive due to the presumed added risk of the loan product. I closed with a 4.5% interest rate, but plan to do a conventional loan refinance in 2017 to lower the rate (if rates haven't increased greatly) and to remove PMI from the loan. I wish you well. Feel free to ask any questions as I've recently gone through the process.

Re: Do I Qualify? VA-FHA (203k)

VALoanMaster — Thu, 04 Feb 2016 18:51:25 GMT

@Anonymous wrote:

Good Evening,

Looking to see if after my 2 year waiting period this June would i qualify for FHA 203k or VA loan for the amount of $225 - $250k.

1. Mortgage Credit Scores:
Mid Mortgage 665
2. Credit Negatives: If you have any, what negatives are on your credit reports. For each negative, please provide:
Type: BK7 : Discharged 6/14
Status: Perfect credit since
3. Gross Income. Gross income (before witholdings, medical/dental, 401k contributions), per your IRS tax returns, is what is important when qualifying, not net income.
Full Time Salary Job 1: $63,500
Full Time Salary Job 2: $40,000
Total Income: $103,500
Not sure if salary from Job #2 will be considered from mortgage. The good its full time and salaried, the bad it since Oct. 2015. Please advise
4. Source of income. Where is the income coming from? List each source.
Employment Type (2 Full time Salary Income)

5. Monthly debt payments.
Credit Card Minimums: $25/mth
Student loans:$40,000 with payments of $450/mth
6. Employment (for those who are employed).
Type of employment: Salaried, 2nd Job is also full time Salaried
How long: 9 mths
How long have you been in the industry: 10 years
7. Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).
I expect to have $8,000 in savings
8. Location:  This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.
Michigan
Genesse or Wayne County
Detroit or Flint, MI
9. Property Description:
SIngle Family Home
10. Property Value.
Looking for $200-$225K
11. Occupancy.
Primary residence, 1st time homebuyer
12. Transaction Type. Purchase

Hi qpitts810,

If you have VA eligibility that's the way you should go. VA beats FHA hands down.

Now on to whether or not you'll qualify.

1) You list income for a 2nd job. This income will only be "used" if you have a 2 year history of working 2 jobs.

2) By the time you hit June you'll 1 full year on your current 1st job so you'll be ok there.

3) Depending on how much taxes & insurance add to the mortgage payment, you should be good for $250,000 with just your primary income.

Re: Do I Qualify? VA-FHA (203k)

StartingOver10 — Thu, 04 Feb 2016 19:04:32 GMT

VA has a rehab loan? ^^^^ Didn't know that. What are the general guidelines and features/benefits of the VA rehab loan vs the FHA 203k?

Re: Do I Qualify? VA-FHA (203k)

VALoanMaster — Thu, 04 Feb 2016 19:48:53 GMT

@StartingOver10 wrote:
VA has a rehab loan? ^^^^ Didn't know that. What are the general guidelines and features/benefits of the VA rehab loan vs the FHA 203k?

Hi StartingOver10,

Technically yes VA does have a renovation option but so far I haven't been able to find an investor/ lender that will do it.

The OP didn't specifically ask about a VA renovation loan, they just asked if the qualified for an FHA 203k or a VA mortgage.

Re: Do I Qualify? VA-FHA (203k)

Anonymous — Thu, 04 Feb 2016 20:03:53 GMT

Thank you for your answers.

I think its best I use the VA loan for myself. Kudos to those who assisted!

Re: Do I Qualify? VA-FHA (203k)

Anonymous — Wed, 11 May 2016 06:52:13 GMT

Quick Update Question:

So I found a home and it is priced at well below market value at $130,000 and I love it. It does need quite a bit of rehab work. Think untouched since the 70's and 3,800 sqft.

Conservative it will need 30K in updates, a full out reno, I expect to be 60-70k. After reno, the home will appraise for much more Im sure of it based upon market and location.

My question is would a 203(k) be the best option for me, granted there are increased cost in terms of APR? While the VA loan is nice, I would not be able to finance any renovations?

Anyone went throught the 203(k) process and can give me insight would be greatly appreciated.

Re: Do I Qualify? VA-FHA (203k)

Anonymous — Fri, 13 May 2016 13:03:28 GMT

*bump*

Re: Do I Qualify? VA-FHA (203k)

VALoanMaster — Fri, 13 May 2016 14:57:26 GMT

@Anonymous wrote:
Quick Update Question:

So I found a home and it is priced at well below market value at $130,000 and I love it. It does need quite a bit of rehab work. Think untouched since the 70's and 3,800 sqft.

Conservative it will need 30K in updates, a full out reno, I expect to be 60-70k. After reno, the home will appraise for much more Im sure of it based upon market and location.

My question is would a 203(k) be the best option for me, granted there are increased cost in terms of APR? While the VA loan is nice, I would not be able to finance any renovations?

Anyone went throught the 203(k) process and can give me insight would be greatly appreciated.

Hi Qpitts810,

An FHA 203K is one option but it's pretty costly in my opinion. You should look into the Fannie Mae Home Style Renovation program as well.

Re: Do I Qualify? VA-FHA (203k)

Anonymous — Fri, 13 May 2016 15:24:52 GMT

Can't do Fannie Mae due to (4 year post chp 7 Bk).. I will be two years post Chpat 7 BK in June. SO VA and FHA (203K) are only available to me.

IN reference to cost, Yes I understand they can be costly: I am elgible for up to $7,500 down payment assistance grant in the state of Michigan using FHA so that helps.