Home financing in Dallas: How hard is it? (Denton, Rockwall: real estate, credit score)

[Brookside]

Hello all,

We will be moving to Dallas soon, and I have a question re the difficulty of obtaining a mortgage. I hear so many stories over the national media, yet I'm thinking (or hoping) that all the gloom and doom isn't accurate for the Dallas area.

We're not first-time buyers. We have good (not great) credit, stable work history, and good income. What we do not have is a 20 percent down payment.

We really need a better idea of what we can expect so that we can price our home here accordingly. In other words, if we can get by with 10 percent, we can perhaps lower the asking price and hopefully sell it more quickly!

Thanks for any help/advice you can offer!

[nsumner]

You need a minimum credit score of 620 and go with an FHA loan with only 3.5% down. If you want to put more money you can but those are the minimum requirements. You loan officer should give you the best advice for your situation since they will look at the big picture and take into consideration your debt ratio, income etc.

For single family homes the FHA loan limit for Collin, Dallas, Denton and Rockwall counties is $271,070. If you purchase a home more expensive than that, then you have to go with the minimum 5% conventional.

Naima

[Brookside]

Thanks Naima --

It sounds like normal standards then. I've read stuff on CNN.com about people with 6-figure incomes getting turned down for various reasons, etc. It sounds really extreme and had us a bit anxious, to say the least.

What about non-FHA (conventional) loans?

[tyanger]

I'll share my recent (current) experience closing on a house with a jumbo loan and 20% down. My wife and I have scores between 790 and 820, and while we had no siginificant problem getting the loan, it did require a lot more paperwork than in 2000 when we bought a home with 5% down also a jumbo (course the cutoff for jumbo has increased a lot since then). Our scores were around 700 back then since we were just out of school. Specifically lenders these days want a long paper trail with detailed documentation of every source of money/income for about the past 1-2 years. It was generally not enough to show the bank statements and paystubs - they wanted to trace deposits into the accounts 2 or sometimes 3 steps back. Now they ask for more information and they actually verify the information - no more 'liar loans'.

So to answer your question - if your finances are truly in order, and you can prove to lenders that they are, you should not have a problem financing a home purchse.

Good luck!

[nsumner]

It is very true that the guidelines are much stricter. Documenting the source of the downpayment is crucial. If you were a homeowner in the past they look at your payment history as well. Paper trail is very important.

Minimum downpayment for a conventional loan is 5%.

Self employed people are the toughest ones to get a loan. Even those that make a 6 figure income. The reason for that is they claim too many things on the tax returns and then it hurts their income amount that the lending institutions take into consideration.

Naima

[GayleTX]

......and if you have changed jobs within the past year, that makes it more difficult, too.....if you are still working in the same field, however, they'll work with you on it.

[Rakin]

Get the names of 2-3 really good loan brokers and spend an hour talking with them about your situation. They should be able to set you up with the best deal on a loan. If you have a real estate agent they should be able to provide you with a name they trust.

A couple of the better / solid banks who have remained strong in home lending is Wells Fargo and Chase. If you have a relationship with them you might include in your loan search. IMO, Avoid anyone who is associated with Countrywide. They are a large reason we are in the mess we are in today.

[roverchris]

Originally Posted by nsumner

It is very true that the guidelines are much stricter. Documenting the source of the downpayment is crucial. If you were a homeowner in the past they look at your payment history as well. Paper trail is very important.

Minimum downpayment for a conventional loan is 5%.

Self employed people are the toughest ones to get a loan. Even those that make a 6 figure income. The reason for that is they claim too many things on the tax returns and then it hurts their income amount that the lending institutions take into consideration.

Naima

Does the $8K tax credit count towards a down payment also? If we put $15K down on a home, would the credit count towards that minus ckosing costs? I'm not a big fan of government programs, but as someone who pays every April 15, I'd like to get some return on my investment. Also, do you think Congress will extend that credit into 2010?

[tyanger]

Originally Posted by roverchris

Does the $8K tax credit count towards a down payment also? If we put $15K down on a home, would the credit count towards that minus ckosing costs? I'm not a big fan of government programs, but as someone who pays every April 15, I'd like to get some return on my investment. Also, do you think Congress will extend that credit into 2010?

I'm not sure where it applies, but don't forget that there are different tiers and exclusions - you don't automatically get all $8k (or any $ for that matter). Also it's for 1st time homebuyers only.

[Brookside]

Originally Posted by Rakin

Get the names of 2-3 really good loan brokers and spend an hour talking with them about your situation. They should be able to set you up with the best deal on a loan. If you have a real estate agent they should be able to provide you with a name they trust.

Thanks Rakin. I guess I was hoping to get the names of a few good brokers. If you know of any, feel free to pm me.

Thanks to all for your responses.