Many Mortgage Loan Questions

Anonymous · ‎10-03-2017

Good Evening.

I am wanting to purchase a home. I have been in the process of getting my credit scores up. My scores currently are TU-708, EX- 689 and EQ- 696. I currently had about a 30 point drop due to an error with Capitol reporting a 30D late when it wasn't. They state they are disputing, I am disputing as well.

Anyway, I have single income of 54,000 annually. I have paid off some cards and am currently utilizing 15% credit on all other cards. My monthly outgoing is approx. 1374.00. (Had to take out a personal loan for my daughter'sdivorce attorney) probably not relevant. I have about $7000.00 in savings. I would like to buy on my own but everything I have calculated says I can afford a shack. I know I can get down payment assistance programs, though I am unsure how those work. My mother is willing to cosign, I believe her scores are between 660-700. I know that she has at least 900.00 outgoing every month and her annual income is $47,000.00. I was pretty positive about purchasing until this recent credit score drop. I have owned before but moved out of state and sold that home, I am tired of renting.

So, I guess, my question is, is there still hope? I am looking at $225,000-$250,000. Should I pay the majority of my cards off or keep saving for a down in addition to the down payment assistance program? I am feeling frustrated and discouraged. Should I sit down with a mortgage lender and if so...who? A bank, a credit union, online?

I know that I have more questions but I really just want some hope or positivity that all is not lost in my desire to once again have the dream of owning my own home. If you need my Mortgage scores, I can get those.

Thank you,

Moneyklutz · ‎10-03-2017

Look online or ask around and find a recommended local mortgage broker and schedule a meeting. Actual face to face time worked for me recently in the same sorta quandry and helped immensely in determining a plan to get from where I'm currently at, to where I eventually want to be.

No cost, other than your time and effort.

Explain your situation and share your FICO scores (to avoid a hard pull) and see what they have say. Conjecture from all the good people here is still conjecture flavored with their own experiences and may not always pertain to you.

There is always hope! What we cannot do today, we might accomplish tomorrow.

Anonymous · ‎10-04-2017

See if you and your location qualify for either of the USDA loans, keep the taxes and insurance as low as possible and avoid homeowners association fees to get the most mortgage for your buck.

Anonymous · ‎10-04-2017

Well maybe not USDA, FHA has higher debt to income ratios I believe.

Anonymous · ‎10-05-2017

@Moneyklutz wrote:
Look online or ask around and find a recommended local mortgage broker and schedule a meeting. Actual face to face time worked for me recently in the same sorta quandry and helped immensely in determining a plan to get from where I'm currently at, to where I eventually want to be.

No cost, other than your time and effort.

Explain your situation and share your FICO scores (to avoid a hard pull) and see what they have say. Conjecture from all the good people here is still conjecture flavored with their own experiences and may not always pertain to you.

There is always hope! What we cannot do today, we might accomplish tomorrow.

Thank you, I will do that!

Anonymous · ‎10-05-2017

@Anonymous wrote:
Well maybe not USDA, FHA has higher debt to income ratios I believe.

Thank you! I was thinking FHA but I am concerned about the PMI, I guess that would be with any loan at this point, right? Without the 20% down?

StartingOver10 · ‎10-05-2017

@Anonymous wrote:
@Anonymous wrote:
Well maybe not USDA, FHA has higher debt to income ratios I believe.
Thank you! I was thinking FHA but I am concerned about the PMI, I guess that would be with any loan at this point, right? Without the 20% down?

FHA has the lowest MIP (Mortgage Insurance Premium) if your score is below 680 and your LTV is above 80%. The rate for FHA's MIP (now) is 85 basis points. So if your loan $100k, for example, the monthly MIP is ~$70.84/month for the life of the loan. I

Conventional loans require PMI (Private Mortgage Insurance) above 80% LTV and it is based on both the LTV and your credit score. Here is a table from one of the PMI companies for your review -the lower the score the higher the rate and it is possible to be approved by the lender, but not the PMI company which would stop the loan. However, if you do qualify for the PMI, you can have the PMI removed when you reach 80% of the original value. There are some exceptions and the lender will want an appraisal done to make sure you are at 80% LTV or lower. Check out this example below -the rates vary tremendously.

https://mortgageinsurance.genworth.com/pdfs/Rates/11370775.Monthly_Natl.FIXED.0616.pdf

Anonymous · ‎10-08-2017

If this in any help to you, we live in Mass and are using a very knowledgable broker. We got preapproved on Sept 5th for 350K on salaries of 107K combined. My broker suggested having my wife go alone since her salary was 65K and middle mortgage score was 803 and would allow us to qualify for other types of loans. She was preapproved for $300k alone and now qualify for loans with closing cost credits and low PMI. My middle mortgage score was 768.

We did some pre-quals online and they were coming back at $200-$230K. We were very down and thought thats all we were going to get. We found our broker through two friends who used him. He took my wifes w2's, bank statements and pay stubs and we had a hard preapproval for 300K about a week after meeting with him.

I would definitely recommend a broker.

User470766 · ‎10-08-2017

My current salary is 55K a year and Im looking to close on a 261K home this december with a middle of Fico of 622. By the time my closing comes around for December FICO should be at least 650-670 as I have paid my balances below 15%. This is an FHA loan with the current preapproval of 3.86 APR and $9100 down payment. All this was possible with a mortage broker.

Anonymous · ‎10-10-2017

Thank you!

@StartingOver10 wrote:
@Anonymous wrote:
@Anonymous wrote:
Well maybe not USDA, FHA has higher debt to income ratios I believe.
Thank you! I was thinking FHA but I am concerned about the PMI, I guess that would be with any loan at this point, right? Without the 20% down?
FHA has the lowest MIP (Mortgage Insurance Premium) if your score is below 680 and your LTV is above 80%. The rate for FHA's MIP (now) is 85 basis points. So if your loan $100k, for example, the monthly MIP is ~$70.84/month for the life of the loan. I

Conventional loans require PMI (Private Mortgage Insurance) above 80% LTV and it is based on both the LTV and your credit score. Here is a table from one of the PMI companies for your review -the lower the score the higher the rate and it is possible to be approved by the lender, but not the PMI company which would stop the loan. However, if you do qualify for the PMI, you can have the PMI removed when you reach 80% of the original value. There are some exceptions and the lender will want an appraisal done to make sure you are at 80% LTV or lower. Check out this example below -the rates vary tremendously.

https://mortgageinsurance.genworth.com/pdfs/Rates/11370775.Monthly_Natl.FIXED.0616.pdf

Thank you