Any chance I can get a mortgage? please help! (PMI, loan, escrow)
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Hi everyone,
I read some messages but did not see anyone with my situation. Hopefully someone would be able to help me. I am an attorney who was working in overseas for the federal government until 2007. I came back to NJ in July 2007 and since than I have been working in temporary legal projects that usually lasts 3-6 months (it seems too many attorneys and no permanent jobs in NJ). My husband is in IT and just found a permanent position. Last year we made $85,000 jointly and currently we make about $9000 per month.
Up until now I have been living with my parents but due to personal reasons I need to get out. Do you thing we could qualify for a mortgage? conventional (I could put 10%)? FHA? My credit score is above 720 but my husband has no credit since he has only been in this country for about a year and half (his name is on my car loan so maybe he has build some credit since last summer). I have a car loan of $365, student loan of about $500, little credit card debt which will be paid off by this summer. I do think I can afford a house of $250,000 - $350,000.
Have you had any gaps in your temporary employment?
Are you W2 or 1099?
Your husband's credit is going to be a big determining factor as well. If it's below 720, it's going to be difficult to obtain conventional financing due to PMI restrictions.
FHA will allow down to 620 (sometimes less, but most lenders are 620 now).
In terms of qualifying, here's the quick and dirty calculation:
1690 Mortgage payment (5% 30 year fixed)
335 property tax
75 insurance
135 PMI
835 Car plus Student loan debt
3070 total monthly debt
So based on 9k/month, you are at a 34% DTI...on FHA, you can go up to 43%, so you would qualify for 350k purchase price w/ 10% down.
but my husband has no credit since he has only been in this country for about a year and half (his name is on my car loan so maybe he has build some credit since last summer).
Add him as an authorized user to your oldest credit card. That will make his credit history longer. Pull his credit at https://www.annualcreditreport.com/cra/index.jsp then you can see if the car loan is there. Do not apply for new credit cards.
You can also use alternate forms of credit. 12 months consecutive payment on utilities, rent, car payments, insurance, etc. Another good form is a secured credit card. You put the money (from $500-$10,000) into an escrowed savings account. Within 3 months he'll have a FICO score.
I think I just lost my first reply so if this shows up twice sorry about it
AndrewSoss - I came back in July 2007 and it took me some time to settle so I did not start looking for a job until September 2007. From October 2007 to present, I was maybe out of work for total of 2 1/2 months, with no gaps in the last 12 months. I do work with an agency so I am a W2 employee.
I am hoping my husband will have some credit to show by this summer. He has an Amex card under my account and as I mentioned his name is on the car loan. I don't know how long it takes to build a score? Is it possible to use his income but not his credit score when borrowing?
Thanks everyone for helpful suggestions.
I think I just lost my first reply so if this shows up twice sorry about it
AndrewSoss - I came back in July 2007 and it took me some time to settle so I did not start looking for a job until September 2007. From October 2007 to present, I was maybe out of work for total of 2 1/2 months, with no gaps in the last 12 months. I do work with an agency so I am a W2 employee.
I am hoping my husband will have some credit to show by this summer. He has an Amex card under my account and as I mentioned his name is on the car loan. I don't know how long it takes to build a score? Is it possible to use his income but not his credit score when borrowing?
Thanks everyone for helpful suggestions.
You should be fine.
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