topic Re: NO new home ??? in Mortgage Loans

NO new home ???

Anonymous — Sat, 01 Nov 2008 02:41:07 GMT

I was told by a mortgage banker that I couldn't buy a new home through FHA loan unless it was at least 1 year sitting empty. Is this really true about FHA loans and are their any other special things I should know. If anyone can help please do cause my wife and I really wanted a new home. Also if it matters we just got out of a CH13 with scores hovering around 670 to 698. Thanks again!!

Re: NO new home ???

BrianB_The_Loan_Professor — Sat, 01 Nov 2008 06:31:27 GMT

If you had at least 12 months paid as agreed on the BK 13 you should be fine based on the scores.

The banker is full of it or really clueless - FHA does not have to be used on vacant homes ????

Wonder what else they are unsure about? Do they offer FHA? I have seen people come up with some crazy stories to steer people away from FHA because they dont offer it?

Brian

Re: NO new home ???

ShanetheMortgageMan — Sat, 01 Nov 2008 15:50:43 GMT

FHA has a 90 day flipping rule where properties can't be purchased for 90 days from the last sale date - unless the last sale was a foreclosure, relocation, etc. But FHA doesn't have any home re-sale requriements for 12 months.

Were all trustee payments made on time for the BK? How long was the repayment plan for?

Where are you looking to buy, how much is the sales price range you are interested in, how much do you make, and how much are your monthly minimum payments on items like car loans, credit cards, personal loans, student loans, etc.?

Re: NO new home ???

Anonymous — Sat, 01 Nov 2008 23:49:19 GMT

Thanks folks for getting back with me. And to answer your questions we made 52 on time payments without any problems, we don't have any loans or payments to anyone to make and we have about 3k in credit cards were trying to get rid of before march. No lates or baddies since BK. We really would like to stay in the 160,000 to 200,000 range oh we have about 3000 net per month, sometimes more but for sure 3k. Thanks again for your help.

Re: NO new home ???

Anonymous — Sun, 02 Nov 2008 01:40:42 GMT

I was told by Quiken Loans that it's an FHA rule that their must have been an occupancy permit for at least 12 months before purchase, meaning someone had lived in it for 12 months or more. We were looking at a new construction at the time. This is not right as most know, but I believed them since they were the first lender we talked to.

Re: NO new home ???

ShanetheMortgageMan — Mon, 03 Nov 2008 06:04:44 GMT

@Anonymous wrote:
Thanks folks for getting back with me. And to answer your questions we made 52 on time payments without any problems, we don't have any loans or payments to anyone to make and we have about 3k in credit cards were trying to get rid of before march. No lates or baddies since BK. We really would like to stay in the 160,000 to 200,000 range oh we have about 3000 net per month, sometimes more but for sure 3k. Thanks again for your help.

Are you planning on buying in March so you'd have no debt whatsoever?

When qualifying for a mortgage, lenders use gross income rather than net income. What is your gross income and where are you looking to buy?

Re: NO new home ???

ShanetheMortgageMan — Mon, 03 Nov 2008 06:06:08 GMT

@Anonymous wrote:
I was told by Quiken Loans that it's an FHA rule that their must have been an occupancy permit for at least 12 months before purchase, meaning someone had lived in it for 12 months or more. We were looking at a new construction at the time. This is not right as most know, but I believed them since they were the first lender we talked to.

Yeah there are some not-so-bright fellas out there. Perhaps Quicken doesn't want to deal with new construction less than a year old? There are some additional requirements in that situation.

Re: NO new home ???

Anonymous — Mon, 03 Nov 2008 10:21:15 GMT

Thanks Shane for the reply, yes march was our target. We didnt want any debt to hinder a purchase. Gross 6k/mo., Arkansas.

Re: NO new home ???

ShanetheMortgageMan — Mon, 03 Nov 2008 16:26:09 GMT

Your income should be fine to purchase a home in the price range you'd be buying in. Your credit should be fine. All you'd have to do is save up the 3% down FHA requires and you'd be good to buy a home from the looks of it.

Re: NO new home ???

Anonymous — Mon, 03 Nov 2008 16:51:28 GMT

Thanks again Shane!! Btw would you happen to know how pmi works, do I pay it forever,can I add it in or pay it off early??

Re: NO new home ???

ShanetheMortgageMan — Mon, 03 Nov 2008 17:48:23 GMT

You are welcome. Yes I do know how PMI works. On FHA mortgages it's just called MI (PMI stands for private mortgage insurance, and FHA's mortgage insurance is provided by the government, not a private party), you are charged an upfront mortgage insurance premium (UFMIP) that can be financed into the loan amount (loan amount increases to cover it) and then also a monthly mortgage insurance (MI) amount. On a purchase transaction the UFMIP is 1.75% of the base loan amount. So a base loan amount of $150k would have a $2,625 UFMIP, making the total loan amount $152,625. The monthly MI is either .5%, .55%, or .25% of the loan amount per year, paid in monthly installments. With loan terms longer than 15 years and less than 5% down, it's .55% per year, with 5% or more down it's .5% per year. With loan terms 15 years or shorter and less than 10% down it's .25%, with 10% or more down there is no monthly MI. So on a $150k loan amount, assuming 3% down, 30-year term, it'd be $825/mo of monthly MI a year, or $68.75/mo. This amount will be added to the PITI payment, you don't have to cut a seperate check each month.

The PMI must be paid for at least 5 years and until your mortgage balance is 78% of the home's original value when you obtained the mortgage... can't pay ahead of time, or early, or a PMI buyout fee, etc.

Conventional financing has different PMI options though. How much are you planning on putting down?

Re: NO new home ???

Anonymous — Mon, 03 Nov 2008 22:19:15 GMT

Thanks Shane once again!! Sadly because of bad times on my job I will be only putting down 3%. If I can get rid of the cc it will be more. We have been renting but we just can't wait any longer old house,bad roof,bad plumbing ,etc... You have been great helping me to understand !!! YOU DA MAN !!!!! Now if I can only find an honest person to work with.

Re: NO new home ???

ShanetheMortgageMan — Mon, 03 Nov 2008 22:31:43 GMT

With 3% down your best option is going to be FHA. If it was 10% or more down then conventional financing would be another option to consider. Arkansas has a lot of areas that are eligble for USDA financing too. USDA doesn't require any down payment and it doesn't have mortgage insurance either. The catch is you need to buy in an eligible area and you can't make too much money. Awhile back I helped someone buy a home in Sharp County, AR with USDA so if that is where you are looking to buy I have a real good real estate agent I can recommend.

Re: NO new home ???

Anonymous — Mon, 03 Nov 2008 23:06:30 GMT

Wow!No down payment,that would be a great option. Garland Co. Thanks!!!!!!!!!!!!!!

Re: NO new home ???

ShanetheMortgageMan — Mon, 03 Nov 2008 23:54:25 GMT

Garland County is quite a ways away from Sharp County so I don't think this agent could help you. Looking at the USDA eligibility map it appears that the big city there, Hot Springs, is pretty much ineligible. But if you were buying out of town, in Piney or Rockwell, those areas would be OK. Your income is a bit on the high side - looks like for a 4-person family the most the household income can be is $70,750, but a 5-person family is OK up to $76,400. There are also some other ways to get below the eligbility level too, like if there are child care expenses, disability expenses, etc.

Re: NO new home ???

Anonymous — Tue, 04 Nov 2008 02:49:15 GMT

Do you think Lake Hamilton would be possible cause it starts to get more of a rural setting out in that area. Also since my job is slower now in the early months of the year the gross is closer to 4200/mo.,4 family members.Thanks you are a God Send!!

Re: NO new home ???

ShanetheMortgageMan — Tue, 04 Nov 2008 03:28:51 GMT

Lake Hamilton should be fine, anything on the south side of the lake is fine. The income is a 2-year average calculation, not just a 3-6 month period of time. W-2's for 2006 & 2007, along with recent paycheck stubs, would be needed. The loan officer will also contact your employer to get a breakdown of your 2006 & 2007 earnings into regular pay, overtime, etc.

Re: NO new home ???

Anonymous — Tue, 04 Nov 2008 05:03:42 GMT

Thanks again Shane, you are truly an asset to this forum. KUDOS x 10 !!!!!!!!!!!

Re: NO new home ???

ShanetheMortgageMan — Tue, 04 Nov 2008 16:21:31 GMT

Welcome!