Posted on: 04th May, 2009 08:25 pm
Here is the real question.
My husband and I are perspective first time home buyers. I have a credit score of 757, I make $55,00 per year and we have 20% to put down towards a $300,000 house. I have been told by one person that I can qualify for a loan and another said that I would not. My husbands credit is bad (below 570) therefore thie would be secured by myself indepenently. I have been given so many different answers and its driving me crazy...
Which would be the best approach...
1) FHA
2) Conventional
3) co-borrower (mother)
Also, the only way to avoid PMI would be to put 20% down, however, doing so wipes out our savings....we would like to have a cushion....Any suggestions on putting less down, I beleive that is what would hinder my ability to qualify for the loan independently.
Please Help!!
My husband and I are perspective first time home buyers. I have a credit score of 757, I make $55,00 per year and we have 20% to put down towards a $300,000 house. I have been told by one person that I can qualify for a loan and another said that I would not. My husbands credit is bad (below 570) therefore thie would be secured by myself indepenently. I have been given so many different answers and its driving me crazy...
Which would be the best approach...
1) FHA
2) Conventional
3) co-borrower (mother)
Also, the only way to avoid PMI would be to put 20% down, however, doing so wipes out our savings....we would like to have a cushion....Any suggestions on putting less down, I beleive that is what would hinder my ability to qualify for the loan independently.
Please Help!!
Well the question about whether you qualify will be based on the debts you have going out on a monthly basis as apposed to the income coming in. Depending on where your looking for a home, I have a program for a reduced PMI. Within this program the monthly MI payment is reduced nearly half and homeowners save up to $3,000 annually. Credit of 720 required up to 90% Loan To Value & 740 Credit up to 95%. I hope this helps...
Hi MrsSmith,
Your credit score is quite good and more than enough to qualify for an FHA loan. These loans require a downpayment of only 3.5%. But you will be required to pay PMI if your loan to value ratio is more than 80%. If you want to have a cushion and does not wish to spend all your savings on the down payment, you can go for a 80-20 loan. You cna take two mortgages, one for the 80% of the home purchase price and another for the rest 20%. This will wipe off the cost of a PMI. But with this kind of a loan, you will end up paying more interest over the life of the loan and the interest rate on the second loan (20%) is also expected to be high.
Your credit score is quite good and more than enough to qualify for an FHA loan. These loans require a downpayment of only 3.5%. But you will be required to pay PMI if your loan to value ratio is more than 80%. If you want to have a cushion and does not wish to spend all your savings on the down payment, you can go for a 80-20 loan. You cna take two mortgages, one for the 80% of the home purchase price and another for the rest 20%. This will wipe off the cost of a PMI. But with this kind of a loan, you will end up paying more interest over the life of the loan and the interest rate on the second loan (20%) is also expected to be high.
Yes an FHA loan sounds pretty good for your situation, They require a 620 min score which you have covered by far and the min down payment is only 3.5% so you should get a very good rate in my opinion. And as stated above and 80/20 loan is good but in the long run you will pay alot of interest. Also being a first time buyer you will qualify for the 8k tax return next year.
Yes an FHA loan sounds pretty good for your situation, They require a 620 min score which you have covered by far and the min down payment is only 3.5% so you should get a very good rate in my opinion. And as stated above and 80/20 loan is good but in the long run you will pay alot of interest. Also being a first time buyer you will qualify for the 8k tax return next year. Also as your husband cannot be a co signer to the loan as his score is too low, You will qualify for the loan just in your name.
i don't know anything about lesser-cost mi programs, but james has given you good information. with a 757 score, a conventional loan makes far more sense than an fha loan for you. you could put down 15%, for example, and pay mortgage insurance, thus retaining some of your own cash for other contingencies.
on an fha loan, you'll pay for mortgage insurance regardless. the loan is insured, after all, by the federal government.
go conventional and get the best deal you can get, all the while being certain that you deal with a forthright and trustworthy loan officer.
on an fha loan, you'll pay for mortgage insurance regardless. the loan is insured, after all, by the federal government.
go conventional and get the best deal you can get, all the while being certain that you deal with a forthright and trustworthy loan officer.
I have ran into some problems when discussing the "me qualifying for the loan myself thing". They have been telling me that my DTI points are too high. I need to be at around 45 and with 15% down on a 300,000 dollar house I am up around 55, therefore not qualifying for the loan indepenetly. I have been given yes's and No's and I am not too sure which is accurate. Its the DTI that is the problem.
My friend, who is a mortgage guy, said it wouldn't be a problem and in disussing it further with another broker, they said it wouldn't work. THe only debt I pay out monthly is my $360 car payment. (as far as what they calculate to determine DTI) Nothing else....no credit cards, nothing financed (outside of the car) and I have a spotless credit report. Its frustrating to be told that I coulnd't do this knowing the good standing I am in as well as the financial backing and credit backing I come with....
My friend, who is a mortgage guy, said it wouldn't be a problem and in disussing it further with another broker, they said it wouldn't work. THe only debt I pay out monthly is my $360 car payment. (as far as what they calculate to determine DTI) Nothing else....no credit cards, nothing financed (outside of the car) and I have a spotless credit report. Its frustrating to be told that I coulnd't do this knowing the good standing I am in as well as the financial backing and credit backing I come with....
mrs smith everyone on the planet uses automated underwriting. your information is input into that system, and what comes back are "findings." those findings are based on your dti - debt to income ratio, credit score, loan to value ratio, amount of reserves (funds after closing), etc.
it has become typical to find that a dti of 55% is not acceptable by the automated underwriting. it's right on the cusp, however, so a slight variation in your favor can point the arrow to "approve" rather than "refer" which it's probably doing at this time.
if you're that close, that's why you're getting conflicting opinions from "mortgage guys."
it has become typical to find that a dti of 55% is not acceptable by the automated underwriting. it's right on the cusp, however, so a slight variation in your favor can point the arrow to "approve" rather than "refer" which it's probably doing at this time.
if you're that close, that's why you're getting conflicting opinions from "mortgage guys."