topic Re: Buy now or later? in Mortgage Loans

Buy now or later?

Anonymous — Fri, 01 Feb 2008 09:32:28 GMT

My Dh and I have decent FICO- low middle score is 710. We are thinking about buying a house right now and have talked with friend who is a mortgage lendor. She says we can get approved for 170K @ 6% (30-yr) no problem... We would be doing 100% financing, cause we have only about 10K cash to use for closing costs.

Now the question: Dh has a BK (ch 7 I think)filed 6-98. I'm told it will drop off in 6 months or so. Will that give our FICO a boost? Would it be enough of a bump that we can afford a larger mortgage if we wait 8 months? In our area we have a alot of forclosures, but the cutoff between decent neighborhood and not good is about 190K...

Re: Buy now or later?

sunrise — Fri, 01 Feb 2008 16:31:23 GMT

With your scores now, you should qualify for the best rates. Usually 680 + get the best rates. The BK is so old it shouldn't be a factor.

If analysts are correct, they are saying many more homes will be in foreclosure this year.

So, I don't think that you should worry too much about the supply drying up before you can get a home.

FICO scores don't really determine what you can afford. (you mentioned $170K) Your income and current debts are your big determining factors on what you can qualify for. So, the more income you have and the less debts....the more home you can qualify for!

Best of Luck!

Re: Buy now or later?

Anonymous — Fri, 01 Feb 2008 22:16:48 GMT

The LO should be factoring in seller contibution to YOUR closing costs - anywhere from 3% to all depending on the program --- Seller can give up to 6% on FHA so lets see: seller gives 6%, you do a 3% DP and cover any remaining costs wit the balance (if there are any). 30 yr fixed - nice rate - not a 'funky' program.

Check with another LO... FHA should have been a big consideration for your situation and the state of the market (FHA is now an acceptable form of finincaing for a seller - it does have slightly higher costs to a seller than other mortgages except VA)

Message Edited by Lady_Scarlet on 02-01-2008 05:16 PM

Re: Buy now or later?

Anonymous — Fri, 01 Feb 2008 22:21:36 GMT

Don't forget a possible gift for the downpayment which the seller can contribute to as well. That could reduce your out-of-pocket to $0 and you can keep the 10k for the constant trips to Home Depot you'll be making.

If you plan it that way and your real estate agent executes it correctly, the FHA way should be good for you. And it is not score driven so you don't need to worry about the BK dropping.

Sunrise has a good point. You might be able to afford more house just by carefully watching the local market and understanding if foreclosures are steady or rising, your home keeps getting bigger and better (or just cheaper).

Re: Buy now or later?

Anonymous — Fri, 01 Feb 2008 22:28:43 GMT

Seller probably won't 'gift' if they have 10K... BUT 3% on first and lower move-up properties is the norm here (again) and their Listing Agent should be factoring that into their net. So I can get 3% w/o much hard selling. 6% would take some negotiation and arm-wringing but can be done as can ALL (on a VA) and that is IF the seller has the available equity to do it. Just had a seller bring $14K to the table to be able to close - they needed to sell and were willing to pay to do it. Seller motivation is a BIG factor