20% down needed? Plus other questions

Anonymous · ‎12-05-2008

Hey All,

Looking to buy a house in the near future, but I have some lingering questions.

1. How far in advance of looking at houses should I speak to a mortgage loan lender? At this point Im not even sure what I'd qualify for, what the payments would be, etc. Im looking to buy in about 3 months.

2. I've heard that its difficult to get a mortgage these days without putting 20% down. True?

3. Any idea what int. rate I'd qualify for? My details: middle FICO is 737, yearly income ~$115K, dont have it now, but I could potentially put 20% if I buy at the end of 3 months. I have a few 120 day lates on my middle FICO from back in 2002 which should be falling off soon. Never a late since 2002, do you think this would still hurt me, even though my score seems fairly good?

EDIT: Almost forgot a huge factor...student loans. Currently have a total of 143k (monthly payments of $665).

4. Soon to be married (May 09). At that point our joint income will be ~$225K/yr. Would it benefit to wait until we're married to buy? Her FICOs are higher than mine. Again, student loans. Future wife also has them, to the tune of 160k.

Sorry for the long post, thanks for any insight!

Wayne

Message Edited by andaheart on 12-05-2008 10:35 AM

Anonymous · ‎12-05-2008

@Anonymous wrote:
Hey All,

Looking to buy a house in the near future, but I have some lingering questions.

1. How far in advance of looking at houses should I speak to a mortgage loan lender? At this point Im not even sure what I'd qualify for, what the payments would be, etc. Im looking to buy in about 3 months.

Well if your planning on buying in 3 months you should be talking to a bank/loan officer/broker about getting pre-approval now as most realtors wont even allow you to look at a house on the market without it especially with the housing situation as is now

2. I've heard that its difficult to get a mortgage these days without putting 20% down. True?

Thats somewhat true but there are plenty of mortgage loans like fha that requires only 3.5% down as well as conventional loans that don't require 20%. The 20% is nice to have but its not a dealbreaker, especially if you have reserves. Now if you live in a area that was hit hard and most people are upside down on their mortgage and trying to get out, then some banks in the area may start asking for 20%

3. Any idea what int. rate I'd qualify for? My details: middle FICO is 737, yearly income ~$115K, dont have it now, but I could potentially put 20% if I buy at the end of 3 months. I have a few 120 day lates on my middle FICO from back in 2002 which should be falling off soon. Never a late since 2002, do you think this would still hurt me, even though my score seems fairly good?
EDIT: Almost forgot a huge factor...student loans. Currently have a total of 143k (monthly payments of $665).

Well that would depend on if you plan on buying by yourself or with your future wife. You listed only student loans, do you have a car payment that has more than 10 payments left, credit cards with balances? All those monthly payments will be added to your debt except a car loan that has 10 payments or less left. Your 120 late is not affecting your score but will improve it some once it's offically off your reports. As far as your rate that would depend on what your local market is setting them at. Every state is different but right now wether you apply by yourself or add the future wife both of your scores will get you the best rate. When you go for preapproval they can tell you what your will qualify for with the salary and debt you have.

4. Soon to be married (May 09). At that point our joint income will be ~$225K/yr. Would it benefit to wait until we're married to buy? Her FICOs are higher than mine. Again, student loans. Future wife also has them, to the tune of 160k.

It wont either way but if you want to buy a higher priced house than use her income and you dont have to wait to get married to get her on the loan application. Assuming that you dont have kids right now you might want to apply together because there a lot of nice houses all over the country that are fairly priced that could accomodate you now as well as any future kids that come down the road. So unless you live in a undesirable neighborhood for schooling, you wont have to sell and buy again

Sorry for the long post, thanks for any insight!
Wayne
Message Edited by andaheart on 12-05-2008 10:35 AM

DallasLoanGuy · ‎12-05-2008

1. now is not too early

2. not true.

3. those lates are too old to be much of a factor

4. no benefit.

Retired Lender