cancel
Showing results for 
Search instead for 
Did you mean: 

FIRST TIME HOMEBUYER - WILL I GET APPROVED?

iamdetermined
Frequent Contributor

FIRST TIME HOMEBUYER - WILL I GET APPROVED?

Hi everyone! I've been gardening for a while, was temporarily disabled from work, and had issues with getting paid timely, so I used cash/credit cards to stay afloat until it resolved. My utilization took a hard hit, and I'm now in a position to clean it up. I have returned to work full-time (no gap in 8 year employment), I am hoping to purchase a new home in the near future vs continuing to pay rent.

 

I need assistance with determining the best way to pay these down/get approved for a mortgage.

 

I had a preapproval from NFCU a few years ago, thinking about going with them again.

I like that they do not sell loans and no PMI. I've read the negative stories, but I had a good experience, I just couldn't proceed at the time.

 

I have a relationship with PenFed - I am strongly considering them as well for the rates. Anyone have any experience with them?

 

And of course I am considering FHA since it will be my first home. 

 

Any lenders that you all can recommend for first time homebuyers is greatly appreciated!

 

Wages income:                             $76k annually  (Monthly $5,865.80) + annual bonus $2k 

P/T Real estate:             approx. $10k annually

 

*Fico 8* (as of today):

EX       713

EQ       703

TU       723

 

13 revolving accounts:  all good standing/paid as agreed

NFCU Amex                                $5,096 balance / $25k limit                                   

NFCU Go                                     $3,894 / $24k 

Chase Freedom Unlimited       $4,518 / $12,500          36% utilization    

Paypal                                         $6,081 / $8k                  76% utilization

Macy's Amex                              $7,050 / $20k               35% utilization

USAA                                           $7,117 / $7,500            95% utilization

Citi                                               $2,779 / $10k

Amex CM                                   $2,501 / $10k

Amex ED                                    $3,185 / $5,500            58% utilization

Discover                                     $3,521 / $7400             49% utilization

Capital One QS                         $4,100/$11,750             37% utilization

Victoria's Secret                         $0 / $5k

HHFCU                                         $0 / $2k

 

Credit cards: total minimum $1,268 monthly payment obligation 

 

Personal loans:

US Alliance.                                 $0 / $2k

NFCU NLOC                   $3,227.88 / $6k        $65/month                     53% utilization

 

Auto loan:             $514/month; $19,418 balance

Auto insurance:   $335/month. (been shopping around for better rates with no luck + claims history...ughhh)

 

Student loans: $45,457 (in forbearance) 

 

Investments

401k:       I'm able to borrow $15k  (I've borrowed $11k already; it's invested in real estate LLC; balance $7800; $97/monthly)

Investor:  $5k (real estate)

Stocks:    roughly $3800   

 

FYI - Not sure what bearing this has but I have not gotten any returns on my real estate investments yet. 

 

Savings: $20k  

 

Other monthly obligations: 
401k repayment:           $97

Cell phone:                   $200  (family plan)

Life insurance               $30

                         

Action plan:  

1) Pay Amex CM to $0 

2) ....?  Pay everything down to 30% (OR what do you all suggest??)  

 

USAA and Macy's are on the top of my tackle list (What % do I need to bring these down to?)

 

I will pull MyFico mortgage scores after Amex updates. (Does it matter? Should I pull them now?)

 

Please share your opinions/thoughts/expertise! 

 

If my profile doesn't appear strong enough to qualify, please share your thoughts on what I can do to improve it to get approved. Thank you!

**PERSISTENCE & PATIENCE** NFCU Amex $25K || NFCU GoRewards $24K || Macy's $20K || Amex Cash Magnet $10K || CO QuickSilver $11,750 || PayPal MC $8K || Amex ED $5500 || USAA Pref. Cash Rewards $7.5K || HHFCU Plat. CC $2K || Victoria's Secret $5000 || Discover IT CB $7400 || Chase $10k || *TOTAL* $112,850.00

NLOC $6K
US Alliance Sig. LOC $2K

OVERALL: $120,850.00

FICO 8 - 4/25/17: EQ 648 - EX 654 - TU 632
FICO 8 - 8/27/18: EQ 684 - EX 696 - TU 713 ; FICO8 1/14/2022 EX 713 - EQ 703 -TU 723 ; Student Loans: ALOT!!
Message 1 of 6
5 REPLIES 5
dragontears
Valued Contributor

Re: FIRST TIME HOMEBUYER - WILL I GET APPROVED?

How much house are you looking for? Your DTI is pretty high right now and you might not be able to afford what you want until you pay some debt off 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 2 of 6
iamdetermined
Frequent Contributor

Re: FIRST TIME HOMEBUYER - WILL I GET APPROVED?

I reside in NY, since covid hit home prices soared and I fear I won't even to get into a house right now. Home values are upwards of $500k. I'm giving a huge rough guesstimate here -- about $400k-$450k. If I'm "reaching," please feel free to tell me to pump my brakes lol.

I've created an action plan to lower my DTI and starting to make payments.

My mother and SO will be living with me; they will be contributing to the household expenses but neither is being added on the loan.
**PERSISTENCE & PATIENCE** NFCU Amex $25K || NFCU GoRewards $24K || Macy's $20K || Amex Cash Magnet $10K || CO QuickSilver $11,750 || PayPal MC $8K || Amex ED $5500 || USAA Pref. Cash Rewards $7.5K || HHFCU Plat. CC $2K || Victoria's Secret $5000 || Discover IT CB $7400 || Chase $10k || *TOTAL* $112,850.00

NLOC $6K
US Alliance Sig. LOC $2K

OVERALL: $120,850.00

FICO 8 - 4/25/17: EQ 648 - EX 654 - TU 632
FICO 8 - 8/27/18: EQ 684 - EX 696 - TU 713 ; FICO8 1/14/2022 EX 713 - EQ 703 -TU 723 ; Student Loans: ALOT!!
Message 3 of 6
dragontears
Valued Contributor

Re: FIRST TIME HOMEBUYER - WILL I GET APPROVED?


@iamdetermined wrote:
I reside in NY, since covid hit home prices soared and I fear I won't even to get into a house right now. Home values are upwards of $500k. I'm giving a huge rough guesstimate here -- about $400k-$450k. If I'm "reaching," please feel free to tell me to pump my brakes lol.

I've created an action plan to lower my DTI and starting to make payments.

My mother and SO will be living with me; they will be contributing to the household expenses but neither is being added on the loan.

You are in trouble 

Income: 76k/year = $6,333/month

Highest DTI allowed (FHA with no overlays and DU approval): 55%

6,333 * 0.55 = 3483

3483-1268-65-514-335-454 = $847 for PITI. 

A 500k mortgage PITI is going to be much more than $847/month.

 

Your focus should be on paying things off to reduce your DTI. 

 

Scores hover around 800
Haven't been AZEO in over a year
Rome was not built in a day, neither is a good credit profile
Message 4 of 6
iamdetermined
Frequent Contributor

Re: FIRST TIME HOMEBUYER - WILL I GET APPROVED?

This is what I needed to hear and know! Thank you, I appreciate you! I have money set aside from the savings noted above and starting to pay some debt down in full to decrease my DTI before they report this month.
**PERSISTENCE & PATIENCE** NFCU Amex $25K || NFCU GoRewards $24K || Macy's $20K || Amex Cash Magnet $10K || CO QuickSilver $11,750 || PayPal MC $8K || Amex ED $5500 || USAA Pref. Cash Rewards $7.5K || HHFCU Plat. CC $2K || Victoria's Secret $5000 || Discover IT CB $7400 || Chase $10k || *TOTAL* $112,850.00

NLOC $6K
US Alliance Sig. LOC $2K

OVERALL: $120,850.00

FICO 8 - 4/25/17: EQ 648 - EX 654 - TU 632
FICO 8 - 8/27/18: EQ 684 - EX 696 - TU 713 ; FICO8 1/14/2022 EX 713 - EQ 703 -TU 723 ; Student Loans: ALOT!!
Message 5 of 6
4sallypat
Established Contributor

Re: FIRST TIME HOMEBUYER - WILL I GET APPROVED?


@dragontears wrote:

@iamdetermined wrote:
I reside in NY, since covid hit home prices soared and I fear I won't even to get into a house right now. Home values are upwards of $500k. I'm giving a huge rough guesstimate here -- about $400k-$450k. If I'm "reaching," please feel free to tell me to pump my brakes lol.

I've created an action plan to lower my DTI and starting to make payments.

My mother and SO will be living with me; they will be contributing to the household expenses but neither is being added on the loan.

You are in trouble 

Income: 76k/year = $6,333/month

Highest DTI allowed (FHA with no overlays and DU approval): 55%

6,333 * 0.55 = 3483

3483-1268-65-514-335-454 = $847 for PITI. 

A 500k mortgage PITI is going to be much more than $847/month.

 

Your focus should be on paying things off to reduce your DTI. 

 


Agree - DTI is way too high for a house purchase.

 

OP should concentrate on finding a good mortgage broker to concentrate on improving DTI, lowering utilization, and increasing 5,4,2, scores.

 

We were in a similar situation almost 2 years ago.

Home prices in Southern California were skyrocketing feeling like being priced out.

 

Found a very patient mortgage broker who had us concentrate on certain debt (disregarded store cards, PLOC, etc) and got our scores up to the point that we can qualify for a conventional first time buyer loan.

Then during the course of a year, he had us work on eliminating the high interest cards that were eating our monies, eliminating the small balance card accounts, and consolidating our major debt into a PL with lower interest and fixed payment terms.

Year later (took over 80 houses searching) we were able to get pre-approved and into a house we closed on 2 months ago.

Best thing since we moved out of the rental - our house is now worth $30K more than when we first started escrow!

 

Message 6 of 6
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.