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Old 07-19-2013, 02:58 PM
 
6 posts, read 23,708 times
Reputation: 13

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Quote:
Originally Posted by 399083453 View Post
Doesn't sound like guys don't make enough to afford this house. You will live in a nice house, but you will be miserable. Nice house and no money is not a good plan. No matter what you "qualify" for, you still need to come up with the payment each month. The lender will provide you with free rope to hang yourself with if that's your wish.
Well, I've actually just graduated from pharmacy school, so money won't be an issue. It's just qualifying on his income/credit score that I'm concerned about.
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Old 07-19-2013, 03:04 PM
 
6 posts, read 23,708 times
Reputation: 13
Quote:
Originally Posted by VictorBurek View Post
Not sure if you are aware, but you can set up 2nd liens basically 2 ways. A balloon, which is you make a payment as if you will be making it for 30 years but you get a balloon payment in 15 years to pay off the balance. You can also set them up on a straight 15 year term where you make the same payment and it is paid in full in 15 years. Also, when doing a USDA loan, you are required to set up a escrow account for taxes and insurance and you will be paying the MI for many many years.

When doing a first and 2nd lien, you have no mi ever, plus you have the option to not escrow taxes and insurance. I have found that a first and 2nd is in most cases the best way to go and will give you an overall better mortgage. And 2nds right now for an 80/10/10 are under 6%. USDA loans now require you to pay the MI for the life of the loan just like FHA requires now which makes them even less appealing today.
Thanks for the info. I will have to look more into 2nd liens. I really don't know much about them...but I will be reading up on them now!
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Old 07-19-2013, 03:09 PM
 
6 posts, read 23,708 times
Reputation: 13
Quote:
Originally Posted by MeInDenudinFL View Post
I am with Victor pay off the car and part of the student loan and THEN think about buying the house. Also, previous home owner with low credit score like that tells me ()that it is better to not rush buying the house with all those debt as they are now.

Good luck!
I think we've decided he will be paying off the car and majority of the student loans.

By the way, he checked his credit score today and it was closer to 680. I think once he pays off those loans (the student loans are counted as 8 separate installment loans, which is hurting his credit), he should be over 700.

His score took a big hit 2 years ago when he found out he had a tax lien from the state of IN. He apparently owed them $50 from 8 years ago, but they never got around to collecting it until 2 years ago- when he no longer lived there. They made no effort to actually notify him. He paid it off immediately once he saw it on his credit, but they won't remove it entirely.
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Old 07-23-2013, 03:18 AM
 
Location: Copenhagen, Denmark
10,932 posts, read 11,655,730 times
Reputation: 13169
Don't you care about the monthly payment amount for the two loans?
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