Pre Qual Completed

[Anonymous]

Went through Pre Qualification Process Thursday, took one day to get pre qualfied.  Have 710, 733, and 678 scores...they used 710.  I am looking in Fargo ND and Moorhead MN area for FHA home.  I had 2 charge offs that need to be paid before I can close (700 dollars total), recieved $6500 first time start up payment asssitance (as downpayment), make about $53k a year but had difficult time saving for down payment, and recieved $170k for home.  My loan officer stated that I would basically have to have the seller pay for half closing costs and I would have to pay 1k down payment (earnest).  Suprisingly, homes go quick around this area, go on the market and within hours they have 3 to 4 offers and sometimes cash offers.  You really cannot touch a decent house around this area for under 150k.  The pre qual is good for 4 months.  I am meeting with a realtor today to go over everything and see how I can attack this market.  Anybody else have similar experiences or has anybody bought around this area?  Tips?  Thanks!

[Anonymous]

That seems low for your income. Do you have a lot of monthly debt payments?

[Anonymous]

Yeah, my DTI is around 43% and I am just by myself.  

[Anonymous]

You might want to shop around. I've seen where lenders go up to around 50% back end DTI. 

[Anonymous]

Also be very, very careful paying those collections. Unless you pay to delete, the CA can update your account when you pay and it can cause your score to drop.

Are you going FHA or conventional. The collection payments could be an overlay. I would talk to another mortgage broker and see what they say about them.

[Anonymous]

I am going FHA, the only thing that scares me is that I have a Lending club loan and recent credit card that will affect DTI when closing time comes that is not figured in yet.  Some say Lending club does not report (have had the loan for a month and it has yet to report).  The realtor that I met with today asked if I wanted to use her lender, she stated she may be able to do "more things" than my current lender.  I just don't want a lot of hard inquiries.  

[Anonymous]

If you have your mortgage scores and your current minimum monthly payments that should be all you need to provide other lenders just to see what you would qualify for. If they give you the # you are looking for then you could proceed with having them pull your credit.

[Anonymous]

Can I ask who your lender is? For FHA, there is no requirement to pay collections, so that is an overlay - if they have one, they are likely to have more you don't know about.

The goal of a realtor and lender is to get you to close the loan so they get paid. I'd at least talk to her lender and see what they can offer. I wouldn't recommend big box banks or online places like quicken. If your realtor has been in the business for a while, they most likely have lenders that can get the deal closed, I'd at least talk to them.

Your pre-approval happened really quickly - what did you have to provide. Just wanting to make sure it's solid.......

[Anonymous]

It is a small bank in Fargo, ND.  I did not have to provide any documentation, basically filled out a application and that is it.  They stated they will need me to give them three years taxes and pay stubs, but other than that nothing else.  The offer is based on contgency of me paying off the charge off and a couple small balance credit cards.  

[Anonymous]

I hate to be the bearer of bad news. That pre-approval is not solid, not one bit. A true pre-approval will collect just about everything they need up front - pay stubs, tax returns (only two years is needed) bank statements, you name it.

I'd talk to the lender your realtor is recommending before doing anything else with this bank.