Ok, here's what you need to know.
~Scores currently 650, 659, 657
~have rebuilt credit (see siggy)
~overall util reporting is 1%, also have a car loan and federal student loans In good standing and current
~1.4 yrs post BK7 discharge (08/21/2013)
~never owned a home, (1st time home buyer)
~last "inquiry" for anything was October 2014, with a new acct (care credit)
~tons of inquiries on all 3 CRA due to rebuilding
~length at same job for 7 yrs
~also have a paid tax lien showing from 2013
so, I'd like to look at buying my first home September 2015 (2 yrs post bk7 discharge), I'm gardening and have NO plans to get new credit, I have plenty!! I'm looking at FHA with the traditional 3.5% down, want a home between. $140k-$170k. I'm hoping by September my scores have climbed another 20pts, and will have a middle score of 670.
My questions are:
Could I still be approved with all those inquires showing, but no "new" ones for 10 months. I'd just tell them they were due to my rebuild.
I have a relationship with Navy FCU already ( car loan,cc, and loc), what are the chances of getting a mortgage with them, or should I try DCU? I also have a membership with them, but no "relationship" really, just checking and savings, no products.
Does anyone offer any help with closing costs ? Ideally I'd like to put NO money down, and have help at closing. Is that even possible? Lol! I just need advice, I'm just not sure about everything. Even 2 yrs post bk, I don't think a traditional bank like Wells Fargo or BoA would even consider me, right?? Don't know where to look too for financing! Any and ALL input would be greatly appreciated, and thank you!!
Hi pizza1 ...glad to see you over here in the mortgage forum
Congratulations on your rebuild. You are right that you need 2 years from discharge for a mortgage so that is good planning.
As to the inq's - they don't really care unless you run out and get a bunch of new credit.
The only zero down payment programs I am familiar with are the VA and some down payment assistance type programs available to first time homebuyers. Check your area for down payment assistance programs here: http://portal.hud.gov/hudportal/HUD?src=/buying/localbuying or you can google "down payment assistance + your county" and see what is available through your county. Same for your state programs.
There are very specific income requirements that you might not meet - depends on the program and the number of HH members. Each program has their own guidelines. Check this out carefully before you apply. I my experience there is no leeway for income. If you are over, you make too much money and can't get help. So read the income guidelines before you apply.
Now, mortgages are totally different than car's and cc's. I am a Realtor so I have worked with CU's and lenders of all types. I love CU's but not so much for mortgages. I have had clients go through NFCU and it was smooth and easy, but that is the exception rather than the rule with CU's IME.
You are better off going to a correspondent lender that underwrites and funds their own mortgage loans. You will get better service and better rates (usually). All they do is mortgages and there is a world of difference. They will sell the loan after closing - usually to one of the big box banks like Wells or BOA. I would stay away from big box banks to originate your loan though - and it is not because you have been recently discharged, it is because of their own loan process.
The big box banks are very, very conservative right now and their process is cumbersome and frustrating to the consumer IME. AND, in my area if you show up with a Wells Fargo or BOA pre-approval you are very likely going to be turned down by the seller - they have a huge fall out rate from pre-approval to closing. Not due to the buyer, but usually to the incompetence of the lender process. Check the threads, you will see.
There are only 3 ways for you to get help with your closing costs:
1) you pay them
2) the lender pays some of your closing costs
3) the seller pays some or all of your closing costs.
The best one is to have the seller pay it if you don't have the funds. To do that you have to have it written into your purchase and sale agreement. Depending on the seller and the market this may be achievable. If you are in a strong seller's market though, it is difficult and will severely limit the inventory available to you.
One more tip: FHA now requires you to pay mortgage insurance for the life of the loan - UNLESS you put down 10% or more. Then the mortgage insurance is only 11 years. This is a good thing to know. It will save you many thousands of dollars if you can put down the 10% and have the MI drop off after 11 years. Also, the 10% down is considered a compensating factor for you (with your Bk). And you get usually get the funds from your 401k if you have one. It is something to think about.
Thank you for all that advice! I think it might be in my best interest to wait a little longer and buy in 2016. I'll have more money saved, don't have hardly any now due to spending all of 2014 paying off a huge federal back tax loan,( which is now paid off!!! Yay)
I'm really not in a hurry and don't need a home, but would like one, since I've never had one. If I wait till then ill have 10% to put down, plus my accts and inquiries will have aged, and my scores close to if not over 700. Might put me in a little better position.
I do have a question though I don't understand.... You said don't try and get a mortgage thru a credit union like Navy FCU?? Why is that again? They do their own underwriting I believe and will keep the loan, from what I understand. Thanks
Let me clarify my earlier post: Navy is one of the few CU's I do think are worthwhile. Navy is the exception. If you can get a mortgage through NFCU then do so.
Most of the CU's I have worked with, other than NFCU, (as a Realtor) have a cumbersome approval process. I don't know why their mortgage side isn't as smooth as their cc or auto side. To me it's unexplainable.
My questions are:
Could I still be approved with all those inquires showing, but no "new" ones for 10 months. I'd just tell them they were due to my rebuild. inquiries are overrated. no problem
I have a relationship with Navy FCU already ( car loan,cc, and loc), what are the chances of getting a mortgage with them, or should I try DCU? I also have a membership with them, but no "relationship" really, just checking and savings, no products. relationship matters a little i guess. still got to qualify
Does anyone offer any help with closing costs ? state/county/city govt programs if you wualify for them Ideally I'd like to put NO money down, and have help at closing. Is that even possible? Lol! I just need advice, I'm just not sure about everything. Even 2 yrs post bk, I don't think a traditional bank like Wells Fargo or BoA would even consider me, right?? they would. a mortgage banker/broker would be better. your hurdle is no money. sellers arent paying a ton in closing costs in a lot of places right now. Don't know where to look too for financing! Any and ALL input would be greatly appreciated, and thank you!!