topic Re: Selling Home?? in Mortgage Loans

Selling Home??

scorepower — Wed, 03 Feb 2016 22:55:55 GMT

Hello,

We are thinking about selling our home to purchase another one closer to my daughters school. Couple of questions I had:

1) We should have a decent equity left for down payment from sale of house but not sure enough for 20% conventional. If not, can we do 10%? pro or cons with that? The purchase price we are looking at is around $700-800K.

2) Can we do FHA loan again even though it's not 1st time buyer? Although it will suck getting a PMI.

3) Right now i think our Fico 08 middle scores are about 640 (middle score). Whats a low score to be approved? I thought it was 620?

The wildcard right now is we are not sure what amount we can qualify for.

Thanks,

Ren

Re: Selling Home??

Anonymous — Wed, 03 Feb 2016 23:33:08 GMT

@scorepower wrote:
Hello,

We are thinking about selling our home to purchase another one closer to my daughters school. Couple of questions I had:

1) We should have a decent equity left for down payment from sale of house but not sure enough for 20% conventional. If not, can we do 10%? pro or cons with that? The purchase price we are looking at is around $700-800K.
2) Can we do FHA loan again even though it's not 1st time buyer? Although it will suck getting a PMI.
3) Right now i think our Fico 08 middle scores are about 640 (middle score). Whats a low score to be approved? I thought it was 620?

The wildcard right now is we are not sure what amount we can qualify for.

Thanks,
Ren

1. Yes, you can do 10% down conventional. Less than 20% down will require mortgage insurance.

2. Yes, FHA is not a first-time buyer loan, you just typically can't have multiple FHA loans at the same time (but there are a few exceptions).

3. Depends on the lender, but most all can work with a 640 score.

Whether you want to go conventional or FHA is something you'd have to sit and discuss with a lender, but typically under 680 will be better off going FHA unless you have 20% down. If your scores are being weighed down by credit card(s) that are near their limit(s), you may want to consider using some of the proceeds of the sale of your current home to pay those cards down and boost your scores (especially if you are going conventional).

It is hard to say without knowing all aspects of your situation.

Re: Selling Home??

scorepower — Wed, 03 Feb 2016 23:41:08 GMT

Hi,

Thank you for the quick response. My credit cards are pretty low. I just use and pay them off. Couple of them have small balances. I had a bunch of lates from when i lost my job after the economic crisis in 08. Lot of my credit cards were defaulted, late payments, etc.

I guess my question now is how do i know how much hom we would qualify for? Using the online calculators are not really that helpful.

Thanks,

Ren

Re: Selling Home??

Anonymous — Thu, 04 Feb 2016 17:38:46 GMT

@scorepower wrote:
Hello,

We are thinking about selling our home to purchase another one closer to my daughters school. Couple of questions I had:

1) We should have a decent equity left for down payment from sale of house but not sure enough for 20% conventional. If not, can we do 10%? pro or cons with that? The purchase price we are looking at is around $700-800K.
2) Can we do FHA loan again even though it's not 1st time buyer? Although it will suck getting a PMI.
3) Right now i think our Fico 08 middle scores are about 640 (middle score). Whats a low score to be approved? I thought it was 620?

The wildcard right now is we are not sure what amount we can qualify for.

Thanks,
Ren

I would check and see what the FHA limits in your county are. At $700-800 K, with 10% down, it is likely that you will exceed your county's FHA loan limit. (Our county has an FHA limit of $417,000, for example.) Just something to think about.

Re: Selling Home??

VALoanMaster — Thu, 04 Feb 2016 18:41:08 GMT

@scorepower wrote:
Hello,

We are thinking about selling our home to purchase another one closer to my daughters school. Couple of questions I had:

1) We should have a decent equity left for down payment from sale of house but not sure enough for 20% conventional. If not, can we do 10%? pro or cons with that? The purchase price we are looking at is around $700-800K.
2) Can we do FHA loan again even though it's not 1st time buyer? Although it will suck getting a PMI.
3) Right now i think our Fico 08 middle scores are about 640 (middle score). Whats a low score to be approved? I thought it was 620?

The wildcard right now is we are not sure what amount we can qualify for.

Thanks,
Ren

Hi Ren,

Everything depends on whether or not the area you want to buy is considered & high cost & as such has higher county loan limits. Loan amounts over $417,000 are considered jumbo & will generally have more restrictive guidelines so that will affect what your options are.

Sure you can do FHA with less down as long as your loan amount falls under the FHA county loan limits.

Your best course of action would be to apply with a lender to see what your options are.

Re: Selling Home??

Anonymous — Thu, 04 Feb 2016 19:05:44 GMT

Great advice above. If you are here in California, the counties with the highest loan limit caps out at $625,500.

Re: Selling Home??

scorepower — Thu, 04 Feb 2016 20:43:08 GMT

Thanks. It's alameda county so it looks like it caps out at $625. So it looks like my option might be 10-20% down.