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Before I get too deep into the process and too attached to the new house, I am hoping you all can lend me some incite as to our situation and offer an opinion if the loan will fund.
We have offered, and are now under contract, $357,990 for a new-build new home purchase. The builder only has a couple of properties left in a very large development and this home is basically standing inventory. We have agreed to use the builder lender because of heavy incentives (all upgrades for “free,” waiving the lot premium (rolling eyes), paying ALL buyer closing costs, including pre-paids); prior to going under contract, they did a preliminary approval – paystubs, limited financials, credit check – and they agreed to my offer and opened a contract.
We are putting 20% down and still will have decent reserves (coming from the sale of various stocks). We keep very little money in our daily checking and savings accounts, rather we move money into harder to access vehicles – stocks, mutual, etc. – because I have basically always been the type of person that if I have $5 in my pocket, I spend $10.
We will be keeping our existing home and using it as a rental property, approximately 75% LTV. Due to a horrific tax situation (no deductions other than standard at all), I wouldn't mind actually losing money on the rental, as long as we can rent it for enough to cover the new house payment. I’m hoping to hang on to the house for a few years while the tenants pay down my mortgage and hope for continued moderate appreciation.
We make about 19K per month gross W2 and have a back-end DTI of about 40% (I think); credit scores of about 645-650 due primarily to high balance, high limit credit cards.
Based on the above information, do you all think we have a shot at getting the loan closed and in a reasonable timeframe?
Before I get too deep into the process and too attached to the new house, I am hoping you all can lend me some incite as to our situation and offer an opinion if the loan will fund.
We have offered, and are now under contract, $357,990 for a new-build new home purchase. The builder only has a couple of properties left in a very large development and this home is basically standing inventory. We have agreed to use the builder lender because of heavy incentives (all upgrades for “free,” waiving the lot premium (rolling eyes), paying ALL buyer closing costs, including pre-paids); prior to going under contract, they did a preliminary approval – paystubs, limited financials, credit check – and they agreed to my offer and opened a contract.
We are putting 20% down and still will have decent reserves (coming from the sale of various stocks). We keep very little money in our daily checking and savings accounts, rather we move money into harder to access vehicles – stocks, mutual, etc. – because I have basically always been the type of person that if I have $5 in my pocket, I spend $10.
We will be keeping our existing home and using it as a rental property, approximately 75% LTV. Due to a horrific tax situation (no deductions other than standard at all), I wouldn't mind actually losing money on the rental, as long as we can rent it for enough to cover the new house payment. I’m hoping to hang on to the house for a few years while the tenants pay down my mortgage and hope for continued moderate appreciation.
We make about 19K per month gross W2 and have a back-end DTI of about 40% (I think); credit scores of about 645-650 due primarily to high balance, high limit credit cards.
Based on the above information, do you all think we have a shot at getting the loan closed and in a reasonable timeframe?
Thank you...
Try to get your score over 660 and even better over 680. You will get a better rate. Sounds like the builder is motivated so it's their lender....should work FHA will be more expensive for you.
On April 1, even conventional loans are changing to where 680 is the new benchmark for the "good" rates and lower scores will come with a premium. Lock your rate in ASAP so you don't have to worry about that deadline.
If you've got 20% to put down, why are your credit card balances so high? That's killing your score!
However, if you have not yet locked in, there is still time to optimize your situation. Your Loan Officer should have suggested this. Use cash to pay down the credit cards to at least less than half the max available balance, more if you can. The lender can do a credit bureau update wherein the paydowns register in a few days, improved scores result, and better terms ensue.
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See below
FHA will be more expensive for you.
