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Old 09-13-2018, 03:19 PM
 
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Hi - Couple of questions:

I'm looking into an FHA loan. My credit score is 728 and I have a large student loan that I'm on an income based repayment plan for. It shows on my credit report that I make $19/month payments. 1% would be $1500/month. My gross income from work is $3814. I receive child support for two adult children, though my ex-husband just pays this to help out. He is no longer court ordered to pay it. That is $110/month.

Does anyone know if I can use my child's social security disability as income, since I am rep payee? That is $803/month.

I've been working with a mortgage broker who said that he was talking to an underwriter who suggested I call my loan servicing company and get documentation as to what my fully amortized monthly payment would be (I'm probably saying that wrong - it's Greek to me). Student loan company said my monthly payment on a 20 year plan would be $1086. My broker said they could use that monthly figure rather than the 1% figure. Has anyone heard of this before? I have no late payments on my credit report and have a $1000 balance (limit is $1500) on a Kohls charge card and a $400 balance (limit is $500) on a Chase charge card. My student loan which will drop off in 7 years.

I've found a house I like. It's listed for $109K, and the seller has said he would take full price for the house, and throw in the vacant lot next door for $1 (separate contracts, of course).

Thank you for any help.

Last edited by lunasister32; 09-13-2018 at 03:24 PM.. Reason: Forgot something
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Old 09-13-2018, 03:46 PM
 
3,806 posts, read 8,248,570 times
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Quote:
Originally Posted by lunasister32 View Post
Hi - Couple of questions:

I'm looking into an FHA loan. My credit score is 728 and I have a large student loan that I'm on an income based repayment plan for. It shows on my credit report that I make $19/month payments. 1% would be $1500/month. Freddie is going to .5%, so Home Possible might be a smarter play, depending on debt ratio. My gross income from work is $3814. I receive child support for two adult children, though my ex-husband just pays this to help out. He is no longer court ordered to pay it. That is $110/month. We do not get to use the child support.

Does anyone know if I can use my child's social security disability as income, since I am rep payee? That is $803/month. I am sorry to have to ask, but is it a permanent situation wherein you are a Lifetime Caregiver?

I've been working with a mortgage broker who said that he was talking to an underwriter who suggested I call my loan servicing company and get documentation as to what my fully amortized monthly payment would be (I'm probably saying that wrong - it's Greek to me). Student loan company said my monthly payment on a 20 year plan would be $1086. My broker said they could use that monthly figure rather than the 1% figure. Has anyone heard of this before? Yes. I have no late payments on my credit report and have a $1000 balance (limit is $1500) on a Kohls charge card and a $400 balance (limit is $500) on a Chase charge card. Pay them down and rescore to get you over 740/760. My student loan which will drop off in 7 years.

I've found a house I like. It's listed for $109K, and the seller has said he would take full price for the house, and throw in the vacant lot next door for $1 (separate contracts, of course).

Thank you for any help.
Freddie Home possible 3% down, est post card-paydown fico = 740+, $3814/2 = 1907 - $750 (student loan)= $1157 max house payment, inclusive of taxes, insurance and conventional MI (use Arch).

$105,730 @ 4.75% (YMMV) = $552/mo. Add 1/12 of prop taxes and Homeowners insurance. With a 740+ fico on that program, MI is looking to be about $46/mo.

So add 1/12th of yearly taxes and 1/12 of a homeowners insurance premium for that property to [$552+46]. and I'm betting you are ok without the kid's SSI. With the SSI you are very ok.
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Old 09-13-2018, 03:52 PM
 
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Quote:
Originally Posted by Pfhtex View Post
Freddie Home possible 3% down, est post card-paydown fico = 740+, $3814/2 = 1907 - $750 (student loan)= $1157 max house payment, inclusive of taxes, insurance and conventional MI (use Arch).

$105,730 @ 4.75% (YMMV) = $552/mo. Add 1/12 of prop taxes and Homeowners insurance. With a 740+ fico on that program, MI is looking to be about $46/mo.

So add 1/12th of yearly taxes and 1/12 of a homeowners insurance premium for that property to [$552+46]. and I'm betting you are ok without the kid's SSI. With the SSI you are very ok.

Thank you for your response! I will have to look at this hard to try to understand, lol.

Yes, my son's disability is a permanent thing. He will always live with me. Thank you again
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Old 09-13-2018, 04:02 PM
 
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Originally Posted by lunasister32 View Post
Thank you for your response! I will have to look at this hard to try to understand, lol.

Yes, my son's disability is a permanent thing. He will always live with me. Thank you again
Bottom Line, you are ok for either loan, but the Freddie Mac Home Possible program is friendlier in regard to the Student loan payment calculation. And the Mortgage Insurance will eventually expire and be removed from the monthly payment without you having to refinance to get it off of there, such as with FHA.
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Old 09-13-2018, 04:13 PM
 
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Originally Posted by Pfhtex View Post
Bottom Line, you are ok for either loan, but the Freddie Mac Home Possible program is friendlier in regard to the Student loan payment calculation. And the Mortgage Insurance will eventually expire and be removed from the monthly payment without you having to refinance to get it off of there, such as with FHA.
Thank you! When you said Freddie Mac is going to .5% (when talking about student loan payments), does that mean they're not there yet?
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Old 09-13-2018, 05:10 PM
 
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The Notification is vague as it says November 1, but it also says Sellers (lenders) can implement it immediately. So your lender is hopefully on the ball.


http://www.freddiemac.com/singlefami...qajrhnhrkvqc59
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Old 09-13-2018, 07:12 PM
 
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Quote:
Originally Posted by Pfhtex View Post
The Notification is vague as it says November 1, but it also says Sellers (lenders) can implement it immediately. So your lender is hopefully on the ball.


http://www.freddiemac.com/singlefami...qajrhnhrkvqc59
I think my mortgage broker isn't paying attention. I've asked him why not conventional through Freddie Mac. He said that 1% of my student loan would be considered in DTI not the .5%. My loan is in repayment and is listed on my credit report ($20/month). I think I've read even Fannie Mae would now take a payment as long as it's listed on the credit report to figure into DTI, rather than the 1%. Freddie Mac also takes into consideration a child's disability payments even if the child (adult) isn't on the mortgage. I'm rep payee for this money, so it comes to me via direct deposit.

Frustrated with myself because I already put a deposit down on the house out of excitement, knowing that houses in the area in which I want to live get sold so quickly.

Back end DTI is 39, Front end is 21 - why so quick to put me in FHA? I'd like to be able to refinance out of having to pay the mortgage insurance after the equity is built up

Thanks again for your comment. Very, very helpful. I know so little about this stuff, and am doing this on my own as a single parent
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Old 09-14-2018, 10:44 AM
 
3,806 posts, read 8,248,570 times
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Quote:
Originally Posted by lunasister32 View Post
I think my mortgage broker isn't paying attention. I've asked him why not conventional through Freddie Mac. He said that 1% of my student loan would be considered in DTI not the .5%. My loan is in repayment and is listed on my credit report ($20/month). I think I've read even Fannie Mae would now take a payment as long as it's listed on the credit report to figure into DTI, rather than the 1%.Credit report might have a by-line on the tradeline, but you are on the right track here! Freddie Mac also takes into consideration a child's disability payments even if the child (adult) isn't on the mortgage. I'm rep payee for this money, so it comes to me via direct deposit. Yes they would just ask for usual supporting documentation, basically 2 pages.

Frustrated with myself because I already put a deposit down on the house out of excitement, knowing that houses in the area in which I want to live get sold so quickly.

Back end DTI is 39, Front end is 21 - why so quick to put me in FHA? I'd like to be able to refinance out of having to pay the mortgage insurance after the equity is built up Agreed.

Thanks again for your comment. Very, very helpful. I know so little about this stuff, and am doing this on my own as a single parent
Continue to trust your instincts, you are doing an excellent job!
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Old 09-14-2018, 02:26 PM
 
Location: Phoenix, AZ
2,797 posts, read 1,320,016 times
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Quote:
Originally Posted by lunasister32 View Post


I've found a house I like. It's listed for $109K, and the seller has said he would take full price for the house, and throw in the vacant lot next door for $1 (separate contracts, of course).

Others have opined about your loan eligibility so I'll just make two helpful comments.


1 - If you can get that vacant lot for $1 grab it.


2 - You can do your own loan amortizing with the following online calculator:


Mortgage/Loan Calculator with Amortization Schedule
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Old 09-15-2018, 08:11 AM
 
Location: MID ATLANTIC
8,135 posts, read 19,975,410 times
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Please do what you can to avoid FHA - the prior administration destroyed that loan program and only those with credit problems, lack of credit, prior credit history events should be using this loan.

Why avoid FHA? The PMI is front-loaded (added to loan amount) and on the loan for life. If you plan to stay for any length of time, you are a guaranteed refinance, which will run you on average 1.5% of your loan balance (depends on state and loan amount).

There's no shame in an FHA loan, but make sure you aren't only being offered that program because your lender doesn't offer anything else!
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