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I posted previously with a somewhat similar question..but here goes. I lost my job in 2009 and due to that, and the fact that our house was completely underwater, we attempted a shortsale..bank offered us a deed in lieu and we accepted..finished FINALLY in feb of 2011. My husband was the only one on any of the loans (mortgage and HELOC). We are almost credit card debt free, leaving us with minimal student loans, and car payment as monthly debt. I work part time making about 800/month and have excellent credit. Might we have a chance at an FHA loan considering my credit score, and the fact that losing my job is what caused our financial problems (along with thousands of others i realize that)? Is that enough of an extenuating circumstance that may help? My husband has a good job, and we will have the minimum 3.5% or more to put down on a new house. Thanks! We were/are open to idea of renting but with the housing prices dropping, monthly rents seem to be far exceeding what we would pay in a new mortgage.
FHA loans weigh different aspects of a borrowers ability to pay, differently than a conventional loan.
The FICO score metrics used are compiled by most lenders by the big 3: Transunion, Experian, Equifax.
Lenders will typically take the middle score for the borrower(s). With that said, are you the co-borrowing?
I would advise against it if his credit is clean. Your part time income can be used to calculate your total household gross income without you being on the loan and your FICO score affecting your interest rate.
I would also advise against 'just' 3.5% down. But I use this lightly because it really depends on where you are in the country. Where I live in Southern California, that puts you at the back of the line if there is a property that others like and are willing to bid on. Lets just say if there were 3 offers on the table for the same amount and someone has 20%+ down, its far more likely that seller would take that offer. I know I would.
My advice to you is, if you can, save a little more for the down payment to get to 5%, get your credit scores and clean them up if there are discrepancies and speak to a lender about your situation. Do you have any other additional savings on the side? I hate to say it, but what you are saying sounds a LOT like what JUST happened in mid 2000s. People feeling like they were going to get priced out of the market and decided to take exotic loans or very low down payment loans.
Just 'because' the housing market has all the right ingredients for a great buy, doesnt mean its a great time to buy for you and your financial situation.
I posted previously with a somewhat similar question..but here goes. I lost my job in 2009 and due to that, and the fact that our house was completely underwater, we attempted a shortsale..bank offered us a deed in lieu and we accepted..finished FINALLY in feb of 2011. My husband was the only one on any of the loans (mortgage and HELOC). We are almost credit card debt free, leaving us with minimal student loans, and car payment as monthly debt. I work part time making about 800/month and have excellent credit. Might we have a chance at an FHA loan considering my credit score, and the fact that losing my job is what caused our financial problems (along with thousands of others i realize that)? Is that enough of an extenuating circumstance that may help? My husband has a good job, and we will have the minimum 3.5% or more to put down on a new house. Thanks! We were/are open to idea of renting but with the housing prices dropping, monthly rents seem to be far exceeding what we would pay in a new mortgage.
It sounds like you are thinking of only putting the mortgage in your name? Because if your husband is on it I doubt he'd qualify. But with an income of $800/month you're not going to get approved for much of a loan. And if your job is part-time I think you will need at least a 2-year history at the same job.
Quote:
Originally Posted by shmoov_groovzsd
I would also advise against 'just' 3.5% down. But I use this lightly because it really depends on where you are in the country. Where I live in Southern California, that puts you at the back of the line if there is a property that others like and are willing to bid on. Lets just say if there were 3 offers on the table for the same amount and someone has 20%+ down, its far more likely that seller would take that offer. I know I would.
Unless it's an all-cash offer (and thus no loan that needs to be approved), what's the difference? The seller is still getting all the money.
Look. Why the rush? Literally it's been about 1 year since you have a deed in lieu. It takes time to rebuild credit on your husbands side.
Agree with this, after just coming out from under a mortgage why the rush to jump back in? Take some time to rebuild your credit and finances, and stabilize your life before you obligate yourself to such a huge debt commitment. Pay off your car and student loan debts, meanwhile building your credit and down payment back up.
I would also advise against just 3.5%, not only because of the FHA up front mortgage insurance, which is a waste, but also because it doesn't leave you in a very solid footing going forward. 3.5% puts you almost immediately underwater once you consider the transaction costs, and if there is any fluctuation in the market. This doesn't leave you with a lot of options if something were to happen going forward.
Unless it's an all-cash offer (and thus no loan that needs to be approved), what's the difference? The seller is still getting all the money.
Yes of course the seller is getting money regardless. That wasnt the point.
In context I said that here in Southern California, if someone is selling a good property and there are 2 or 3 offers on the table, all at the same offer price and there is one that is offering more skin in the game like 20%+ down conventional, a good agent would tell their client to take that one instead of the FHA offer.
There have been many FHA deals are getting killed at the 11th hour that I heard about.
If I was selling my house and that was the scenario, I would do the same. FHA loans because of their low down payments are an end around to the bubble we are just coming out of with the low down payments.
Yes of course the seller is getting money regardless. That wasnt the point.
In context I said that here in Southern California, if someone is selling a good property and there are 2 or 3 offers on the table, all at the same offer price and there is one that is offering more skin in the game like 20%+ down conventional, a good agent would tell their client to take that one instead of the FHA offer.
There have been many FHA deals are getting killed at the 11th hour that I heard about.
If I was selling my house and that was the scenario, I would do the same. FHA loans because of their low down payments are an end around to the bubble we are just coming out of with the low down payments.
But if the buyer needs any loan at all there's still the chance that the deal gets killed. Sure, if the offers are exactly the same otherwise then you have a point. But that's rarely the case and not every house has 3 or even 2 offers on it.
Just rent and save. The market will still be in the gutter when your ready to buy.
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