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I'll try to make this quick. I e-mailed a Loan Officer at my local Wells Fargo in MN and asked him to give me my chances of getting an FHA or Conventional loan with the following financials I gave to him. I would like some advice if he is right or if there just tough lenders. And suggestions on what I should do next would be really really appreciated.
Salary-$40k
Bonuses-7,666
Debt: Student Loans=$344/month Boat Loan=$273/month Other Debt-$0
Rent:$0
Credit Scores: Exp.-751 Equ.-740 T.U-709
Savings-9k
I'm looking at homes from 125k-160k. My net pay per month is $2400 and if bonuses are averaged into my monthly net I'm at $2816.
I really could use some good advice, thank you.
Well he could just not want to waste his time. I know a little about Wells Fargo loan officer compensation and I do know that it is based on loan amounts - and some might be more concerned with these refinances rather than purchases since a refinance is a guaranteed transaction to start right then and a purchase is going to happen sometime down the road. What loan officers need to understand is that it's great to have refinance clients, but the purchase clients is what makes a career.
The question should be: is there a type of loan officer I should be targeting? Not a type of lender. You are going to get all sorts of loan officers at any lender - the loan officer who doesn't care about purchases, the loan officer who only does purchases, the loan officer who does this, does that, etc. What you want is the loan officer who is going to give you the attention and time you situation needs in order to make sure you get approved. No Google search, lender website, third party website, etc. will help you with that. The best place to start in my opinion are referrals. Get a referral from a friend, co-worker, family member, your real estate agent, your dentist... anyone whose judgment you trust and have obtained a mortgage, ask them. You probably only really need 3-4 loan officers to talk to, but feel free to continue talking to them until you feel comfortable with one, get a GFE from them and from 2-3 other places, compare, contrast the offers & the loan officers... and you'll make the right decision.
If you have rec'd the bonus income for 24 months then a 24 month average can be used... if that comes out to $7,666, then $47,666 is the amount of qualifying income that would be used.
Not sure where in MN you are buying, but let's assume it's Hennepin County where taxes are a little bit more, typically about 1.5% of the sales price or so. Let's also take a $160k sales price with 3.5% down, and a current rate of 5.5%. P&I would be $892/mo, and then taxes, insurance & MI combined would equal $1,227/mo. $3,972 / $1,227 = a 30.9% housing ratio, so that is fine, however when you throw in the $617/mo of other debts and do the total debt ratio calculation, it gets to 46.5%. A debt ratio that high could pose an issue to conventional... as Freddie Mac as well as a couple MI companies want that 45% debt ratio (Fannie Mae and the remaining MI companies are OK with 55-64.99% DTI's). However with FHA financing that should be fine as long as you have some compensating factors. Your compensating factors could be your 700+ scores, if you can hold onto $3k of your savings after the down payment and any closing costs the seller would pay for... and then if you could put 5% down vs. just the minimum 3.5% down. I've seen much worse qualify for FHA, and I'm sure Wells Fargo has approved much worse... you might have got a newbie loan officer who was reading guidelines rather than using past experience to formulate opinions.
I have received the bonuses in consecutive years and it is an annual deal with my boss. My father has worked for him for 30+ years, has never not given a bonus. (lender might not care but it's the reality)
The location will be in Wright or Anoka county. The sales price tax may be lower? I'll check into it unless you know off hand.
On a 150k house a 5% down payment would be $7500. I should be able to have $10,500 in my account by the end of Febuary.
The mortgage guy isn't a newbie but I know he is flooded with refi request and maybe he doesn't want to waste his time being a little creative with me or has bigger fish to fry.
ShanetheMortgageMan- Is there certain type of lenders I should be targeting? Banks, Mortage brokers etc? Do you have any suggestions for online researching in MN that will help me narrow down my target lender, websites, google searches? I really appreciate the help.
Well he could just not want to waste his time. I know a little about Wells Fargo loan officer compensation and I do know that it is based on loan amounts - and some might be more concerned with these refinances rather than purchases since a refinance is a guaranteed transaction to start right then and a purchase is going to happen sometime down the road. What loan officers need to understand is that it's great to have refinance clients, but the purchase clients is what makes a career.
The question should be: is there a type of loan officer I should be targeting? Not a type of lender. You are going to get all sorts of loan officers at any lender - the loan officer who doesn't care about purchases, the loan officer who only does purchases, the loan officer who does this, does that, etc. What you want is the loan officer who is going to give you the attention and time you situation needs in order to make sure you get approved. No Google search, lender website, third party website, etc. will help you with that. The best place to start in my opinion are referrals. Get a referral from a friend, co-worker, family member, your real estate agent, your dentist... anyone whose judgment you trust and have obtained a mortgage, ask them. You probably only really need 3-4 loan officers to talk to, but feel free to continue talking to them until you feel comfortable with one, get a GFE from them and from 2-3 other places, compare, contrast the offers & the loan officers... and you'll make the right decision.