PenFed Mortgage?

[Anonymous]

Real estate agent here. Off the top, with income of $72K and credit/car payments, you're doing well to get 250.  Your credit score determines the interest rate, and of course, the lower the rate, the more purchasing power. I'd get those credit cards down to less than four months owing and see what happens. (If you owe less than four months minimum payments, most lenders will not treat those payments as debt.).

Do you have a student loan? They'll treat 1% of that loan as a current debt.

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@Credit_Flavours wrote:

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@sxa001 wrote:

I was thinking about starting my own thread, but since it is specific to PenFed I thought i would just add to this thread.  

For those that have gone with PenFed, any thoughts on if they would be a good fit for someone only planning to put 5% down on a conventional with a 776 MMS and a clean credit report?  Looking at hoping to get approved for at least 300k.  I will start my loan shopping in November but if PenFed may be a good fit for me I was thinking about getting my account set up.  

Their rates look really good, so I feel like I have to consider them. 

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Well, I applied with them this past Friday but was somehow approved for only $250k by the LO with a 724 MMS and the lowest interest rate of 2.65%. I am first time home buyer and putting just 3% down. DW is on the application with me.

We decided to use our W2 income only($72k) which we believe is sufficient for the amount we needed and to avoid all the paperwork that goes with schedule C/business income. Total monthly payments are $539 (car payment and CC). Clean profile. Both of us are members with a 2-year history with them.

The funny part is that I was seeking $350k which is what we had been pre-approved for by 2 other lenders at 2.75% and 2.85% but for some reason, she said her "computer" won't let her do that much. Don't know what kind of overlays they got going on there but with your score, I think you should be fine once your income and DTI support it.

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[randomguy1]

Here is the loan estimate I was quoted @ 2.625% . 

Lender credit was $1000.

[WhiteCollar]

@MyFault Why are FHA loans a terrible choice?

[MyFault]

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@WhiteCollar wrote:

@MyFault Why are FHA loans a terrible choice?

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Mainly because of mandatory PMI for the life of the loan, and the PMI payment is extremely high. The ONLY reasons to ever even think about going after an FHA loan is due to your credit score, or to get qualified if your DTI is too high for a conventional loan. But, if your DTI is at the level that requires an FHA loan then i suggest either trying to increase your income, or lower your debts before locking yourself into a 30 year mortgage. If your credit score is too low for conventional i'd also suggest increasing your credit score, first, before buying a home.

FHA does also allow a smaller downpayment at most banks as well. However i don't suggest getting into a mortgage with less than 5% down. 

You can qualify for a conventional mortgage with 5% down payment. The PMI monthly payment is much lower. And the PMI falls off the loan automatically once you've hit 22% equity of the original loan size.