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Background:
Salary - less than your husbands, but more than 50k
Credit scores: 665 - 695
debt: minimal, 2 car payments and impending student loans (Deferred 'till 2009)
Am looking at homes in Cincinnati - and have been approved for a mortgage of over 200K.
I was worried, because as of this summer I was paying off all my credit cards and so did not know how positively it would affect my credit rating.
Now, I am not looking at houses in the 300's so obviously my situation and yours is different.. but I was suprised to be so easily approved in the range I want.
Yes, my interest rate will be a little higher than I'd like (i'm getting quotes of 6.75 or 6.5 with 2 points).. but anything under 7 is okay with our budget. I haven't locked a rate yet as I am hammering out details with the builder today, but plan to do a 9month lock (during the build) within the next week.
But, I am also planning on putting 20% down on the purchase price of the home - so instead of financing 250K, I am only going to finance/mortgage 200K. It does make a difference.
I have had many clients call me thinking they wouldn't qualify for a mortgage because either they didn't understand credit scoring, had heard horror stories from friends about getting turned down, etc. and low and behold, not only do they qualify but are in a prime, conforming situation.
I have had a lot of the opposite though. Folks that drive around, find and fall in love with a house, then apply for the loan and are heart broken that they can't buy a house because they have either no credit or haven't paid a bill in years!
I always recommend to talk to a mortgage broker and get pre qualified BEFORE looking for a house.
I'm with Mbmouse on this one... honestly I'd say about 60% of the time it's exactly the opposite of what people think, especially if they are passionate about their qualifications. The people who tell me they have perfect credit, tend to be in the mid 600's or lower. The people who are freaked out because they had two late car payments often end up being in the 700's. Granted they think being 18 days late on a car payment hurts their credit. Very few people realize it's the 30 days late mark that hurts your credit.
Did anybody here ever applied for a mortgage Loan, thinking that he/she might not get approved but tried anyways and everything was just fine?
He-he, sometimes it's better for your future sleep to NOT be approved. I'm waiting for a new house to be built. If the rates go nuts, the builder's lender will still approve me (they go for up to 50% of GROSS income). It's highly questionable if I want it, though. The way things are going, I start thinking whether I should get the 6-month lock, which is very expensive and doesn't make sense generally in somewhat normal times, but it can be priceless in a very volatile environment.
I'm doing a 9month lock!!! We're building as well... but the builder is giving us 2points to use, and we're using that to lock the rate and buy down the rate..
So - I'd say its the best piece of mind a few thousand can buy you!
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