topic Are we in decent shape? in Mortgage Loans

Are we in decent shape?

Tal — Mon, 19 Jun 2017 22:53:37 GMT

I haven't posted in here in a LONG time but I am in need to some help. My husband and I are trying to purchase our first house and we're not too good at this adulting thing but we're trying our best. We live in San Diego, CA and are currently renting and our lease is up at the end of November so we are trying to buy a house before then. We've been monitoring our spending and credit carefully since we moved here (in April). My current FICO mortgage scores are 760 (TU), 763 (EX) and 771 (EQ). My husbands are 700 (EQ), 704 (TU), and 706 (EX). We were trying to get preapproved at the end of July so we can start looking but I'm not to sure if our scores are good enough to get a good interest rate and APR. I keep hearing in the state of California that we both have to be credit checked to get a loan because we're going to be living under the same roof, and then I hear that I can get the loan by myself and they'll use both our incomes. We are using the VA loan so we don't have a down payment but we still have money stashed away for the whole house buying process. He wants to get preapproved ASAP, but I'm so wary about it because I feel like we're just not there yet but we don't really have the time to wait to get our scores any higher (well, at least for me I think).

According to myFICO, I have a short credit history (we're both 27 by the way) and I have delinquent payments (my mom was paying my car loan while I was in college and missed three payments back in late 2011). The FICO score simulator best scenario for me is to keep paying my bills on time for the next 24 months or pay down $2200 on my $9k student loan. I don't think there is much hope for me getting my score any higher than it already is by the end of July.

My husband has had a series of bad financial decisions (before he met me, heh) like high credit limits and other debt (one personal loan and one consolidated loan). He is currently paying down his credit cards and should be below 20% utilization by the time we are planning to get preapproved, but I'm still not sure. Is there anything else that we could do? Or am I being paranoid?

Re: Are we in decent shape?

medicgrrl — Tue, 20 Jun 2017 00:41:08 GMT

Your score's are great for a VA loan. Your husband's score's should increase after he gets his utilization below 9%.

Re: Are we in decent shape?

VALoanMaster — Tue, 20 Jun 2017 01:48:30 GMT

@Tal wrote:
I haven't posted in here in a LONG time but I am in need to some help. My husband and I are trying to purchase our first house and we're not too good at this adulting thing but we're trying our best. We live in San Diego, CA and are currently renting and our lease is up at the end of November so we are trying to buy a house before then. We've been monitoring our spending and credit carefully since we moved here (in April). My current FICO mortgage scores are 760 (TU), 763 (EX) and 771 (EQ). My husbands are 700 (EQ), 704 (TU), and 706 (EX). We were trying to get preapproved at the end of July so we can start looking but I'm not to sure if our scores are good enough to get a good interest rate and APR. I keep hearing in the state of California that we both have to be credit checked to get a loan because we're going to be living under the same roof, and then I hear that I can get the loan by myself and they'll use both our incomes. We are using the VA loan so we don't have a down payment but we still have money stashed away for the whole house buying process. He wants to get preapproved ASAP, but I'm so wary about it because I feel like we're just not there yet but we don't really have the time to wait to get our scores any higher (well, at least for me I think).

According to myFICO, I have a short credit history (we're both 27 by the way) and I have delinquent payments (my mom was paying my car loan while I was in college and missed three payments back in late 2011). The FICO score simulator best scenario for me is to keep paying my bills on time for the next 24 months or pay down $2200 on my $9k student loan. I don't think there is much hope for me getting my score any higher than it already is by the end of July.

My husband has had a series of bad financial decisions (before he met me, heh) like high credit limits and other debt (one personal loan and one consolidated loan). He is currently paying down his credit cards and should be below 20% utilization by the time we are planning to get preapproved, but I'm still not sure. Is there anything else that we could do? Or am I being paranoid?

Your scores are great for a VA loan & should put you in line for some of the best rates available.

CA is a community property state so if one of you is not going to be on the loan, your credit still has to be checked & your individual debts counted against the debt ratios UNLESS you have your own source of income & it's enough to cover your debts & you're working with a lender that knows what they're doing.

Since it doesn't appear that either of you have any serious credit issues I don't see any reason why you both wouldn't be on the loan.

Re: Are we in decent shape?

Anonymous — Tue, 20 Jun 2017 05:31:01 GMT

With a VA loan I see no problem with the credit scores for either of you. You guys should be fine so long as there are no baddies that haven't been mentioned.

Yes, CA is a community property state and the VA Loan program probably required both spouses' debt to be included in the DTI ratio (though I am not the expert I assume it is similar to FHA in that regard).

However, each spouse has the right to buy their own real property and to have credit in their own name. So if there are limitations with either it seems they would lie with the VA loan program.

I am in CA and our loan will be in my name only due to wife's lower scores (she's catching up quickly). She will be on the deed with right of survivorship.

I'd imagine that if his income is used his debt will need to be counted also. Again, I'm not an expert. My knowledge is quite limited, actually. I just know from experience that one spouse buying a property with a loan in only their name is possible with the right mortgage loan. That was necessary in our case but doesn't appear to be so in yours.

Good luck to the both of you!

Re: Are we in decent shape?

Tal — Tue, 20 Jun 2017 18:44:32 GMT

Thanks. I've heard from some of my colleagues who have recently purchased a home and one said he and his wife got the lowest rate of 4.8% through their mortgage broker and he claimed that his score is in the 800s while another friend said his rate was 3.7% (high 700s score) with NFCU. I'm not sure if I believe what he told me with a 4.8% APR because that seems quite high in my opinion, especially when they said they used the VA loan.

You've put my mind a little at ease with us obtaining good rate; I just wish I could ballpark where our rates might fall. 3.7% and 4.8% are scary differences.

Re: Are we in decent shape?

VALoanMaster — Tue, 20 Jun 2017 19:52:56 GMT

@Tal wrote:
Thanks. I've heard from some of my colleagues who have recently purchased a home and one said he and his wife got the lowest rate of 4.8% through their mortgage broker and he claimed that his score is in the 800s while another friend said his rate was 3.7% (high 700s score) with NFCU. I'm not sure if I believe what he told me with a 4.8% APR because that seems quite high in my opinion, especially when they said they used the VA loan.

You've put my mind a little at ease with us obtaining good rate; I just wish I could ballpark where our rates might fall. 3.7% and 4.8% are scary differences.

The thing about APR is it will vary for each situation. Your friend's Funding Fee may have been higher or they may have taken a higher rate to get a lender credit to help cover their closing costs. You should be looking at 3.7 for a starting point.

Re: Are we in decent shape?

Anonymous — Tue, 20 Jun 2017 21:00:50 GMT

FWIW my husband and I were approved for a 0 down VA loan about 9 months ago with a score of 640. We were offered 3.35% but ended up taking 3.5% for the lender to cover all closing costs. Total out of pocket expenses for us to buy the house was a $500 appraisal alhtough we had to put $3k down in earnest money, which we got back a few months later at closing. We had no lates or delinquincies in over a year, and a very low debt-to-income ratio which helped our approval.

Check NFCU. They are offering rates as low as 3.2%. I don't know if CA is different, because we qualified in Oregon, but I would think you should easily be able to get an interest rate under 4%. I would definitely recommend financing through NFCU if you can and I highly recommend them, the VA process for us was pretty easy, all things considered.

Our mortgage lender looked at the lowest mid-score between me and my husband (which was 640) and used that for the loan. Your lowest mid currently is 704 which is great!