Posted on: 04th Aug, 2008 11:12 am
We are interested in building a modular home with a recognized adn well established builder (Stratford Homes) and have received an estimate of about $200K as the final building cost. We also have an additional $40K in land costs that we would need rolled into the loan as well, if at all possible.
Considering the state of the current housing market we are wondering what we would need to do to be able to qualify for a loan of this size. Currently our combined income is about $132K, with my husband making about $75K and me making about $57K. Our credit scores are in the high 600s to low 700s for me and the low to mid 600s for him. However, I just paid off about $21K in credit cards this month which have not yet been reflected in my score so I expect that to jump up a bit in the next few weeks. Additionally, I will also have the remaining cards completely paid off in January. Once that is accomplished all we will have for debt (assuming we can sell our other home) is a little under $11K in a line of credit and our car loan which will be at about $13K or so by January. So, given that information, my questions are these:
1. Do we have any chance at all of qualifying now to build or do we definitely have to wait until after January when all of the cards are paid off and the scores improve?
2. Assuming we do wait until January, do we have a chance of qualifying then?
3. My husband is being offered position at another company which would be about a $10K reduction in his salary. This would be somewhat mitigated by a guaranteed increase that I have coming on November 1st that will bring my salary to $58,350. I also have an additional guaranteed increase of at least $5200, possibly more, coming in April which would bring me up to $63,600. So, given these facts, would it be ok from a financing perspective for him to accept this position at the lower wage? Or would we need him to stick with the higher paying job until the house is completed?
4. Lastly, what is the downpayment we would need to qualify for a loan and, at what point does an increased downpayment offset the credit score and debt issues? In other words, at what point are we better off saving up more of a downpayment than paying off debt?
Essentially, we want to begin the building process as soon as we possibly can and are looking for the best and quickest way to accomplish that and what we need to do from here. Any guidance or advice anyone can give us on what our best options are from here would be greatly appreciated.
Thank you in advance!!
Considering the state of the current housing market we are wondering what we would need to do to be able to qualify for a loan of this size. Currently our combined income is about $132K, with my husband making about $75K and me making about $57K. Our credit scores are in the high 600s to low 700s for me and the low to mid 600s for him. However, I just paid off about $21K in credit cards this month which have not yet been reflected in my score so I expect that to jump up a bit in the next few weeks. Additionally, I will also have the remaining cards completely paid off in January. Once that is accomplished all we will have for debt (assuming we can sell our other home) is a little under $11K in a line of credit and our car loan which will be at about $13K or so by January. So, given that information, my questions are these:
1. Do we have any chance at all of qualifying now to build or do we definitely have to wait until after January when all of the cards are paid off and the scores improve?
2. Assuming we do wait until January, do we have a chance of qualifying then?
3. My husband is being offered position at another company which would be about a $10K reduction in his salary. This would be somewhat mitigated by a guaranteed increase that I have coming on November 1st that will bring my salary to $58,350. I also have an additional guaranteed increase of at least $5200, possibly more, coming in April which would bring me up to $63,600. So, given these facts, would it be ok from a financing perspective for him to accept this position at the lower wage? Or would we need him to stick with the higher paying job until the house is completed?
4. Lastly, what is the downpayment we would need to qualify for a loan and, at what point does an increased downpayment offset the credit score and debt issues? In other words, at what point are we better off saving up more of a downpayment than paying off debt?
Essentially, we want to begin the building process as soon as we possibly can and are looking for the best and quickest way to accomplish that and what we need to do from here. Any guidance or advice anyone can give us on what our best options are from here would be greatly appreciated.
Thank you in advance!!
oh my...it's 5 pm and i am tired...that's a lot to consider and the current state of the mortgage market discourages those who desire to build.
let me ruminate on it all night and see if can't come up with some reasonable information in the morning.
let me ruminate on it all night and see if can't come up with some reasonable information in the morning.
Hi Stephr,
Welcome to our forums.
Your credit scores are good enough to help you qualify. Your spouse's score may be in mid 600's but that's ok considering your scores are appreciable. I hope you too will be on the loan, isn't it?
Now, since you have debts such as line of credit and car loan, I suggest you calculate the debt ratio using the DTI calculator and see if it is within 36%. I personally feel it's better to clear some of your debts and then save for a down payment.
"would we need him to stick with the higher paying job until the house is completed"
I don't think it's necessary if you are using both of your incomes to qualify. Hopefully any reduction in your spouse's income can be supplemented by an increase in your income as you've said.
"what is the downpayment we would need to qualify for a loan "
It can be somewhere around 15-20% of the modular home with little variation from one lender to another.
As far as the loan options are concerned, you can attend a no-obligation free counseling session with our community lenders. They'll be able to help you decide as to which loan is best for you.
Good luck
Welcome to our forums.
Your credit scores are good enough to help you qualify. Your spouse's score may be in mid 600's but that's ok considering your scores are appreciable. I hope you too will be on the loan, isn't it?
Now, since you have debts such as line of credit and car loan, I suggest you calculate the debt ratio using the DTI calculator and see if it is within 36%. I personally feel it's better to clear some of your debts and then save for a down payment.
"would we need him to stick with the higher paying job until the house is completed"
I don't think it's necessary if you are using both of your incomes to qualify. Hopefully any reduction in your spouse's income can be supplemented by an increase in your income as you've said.
"what is the downpayment we would need to qualify for a loan "
It can be somewhere around 15-20% of the modular home with little variation from one lender to another.
As far as the loan options are concerned, you can attend a no-obligation free counseling session with our community lenders. They'll be able to help you decide as to which loan is best for you.
Good luck
