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Mortgage questions......

C

Codewiz

Diamond Member
I recently got married. My wife and I are looking to buy a house now.

Here is our financial situation. We gross around 85K together. She makes about 43K and I make about 42K. We are looking at spending around 160-180K on a house.

She has been employeed at her current job for about a week. I have been employeed at my current job about 1.5 years.

I do not have a great credit history. Ran into some issues while I was in college. I was late on some payments and that really hurt me. I am getting around a 630 credit score. My wife has pretty much perfect credit. I believe she has around a 780 credit score.

How should we approach a mortgage to get the best rate?
 
You didn't state how much you have for a down payment.

And I'm not a mortgage banker, but I think the fact that both of you have relatively light current employment histories will work against you.
 
Originally posted by: glenn1
You didn't state how much you have for a down payment.

And I'm not a mortgage banker, but I think the fact that both of you have relatively light current employment histories will work against you.
Click to expand...

Yeah not much you can do fresh out of college. Something that might help me is that I am a federal government employee.

We aren't looking to put anything down. Looking to do 100% financing as a first time homeowner.

 
Contact a mortgage broker or two and see what they can track down for you. A 630 FICO score is pretty bad. I think the lowest my company will accept is a 620 and even then you'll probably be getting a higher interest rate.

Dave
 
Buy as much land as you can near the City and then build...you'll be glad you did later :music:
 
Originally posted by: Apathetic
Contact a mortgage broker or two and see what they can track down for you. A 630 FICO score is pretty bad. I think the lowest my company will accept is a 620 and even then you'll probably be getting a higher interest rate.

Dave
Click to expand...

Incorrect.

The lowest Ameriquest (retail) and Argent (wholesale through a broker) will accept is 500. I'm sure Long Beach and DiTech are similar.

It costs nothing to call around. You're not going to get a 5% rate with a 630, but you aren't gonna get a 15% either.

If you can afford it, buy a house and pay the higher rate due to credit. Once you've owned the house for a few years, your score should hit the mid 700's if you take care of your credit. Then you can refinance at a lower rate (assuming the rates stay the way they currently are).

I work for Ameriquest (Business System Analyst, not sales) and get to see how we work hundreds of loans. Your score is pretty typical of a young couple and isn't a problem.
 
I do NOT have the be the primary purchaser. My wife has a much higher score. So does that not matter at all. That is why I posted. I figued it would help the situation for me to be a co-borrower and let my wife be the main buyer.
 
Originally posted by: Codewiz
I do NOT have the be the primary purchaser. My wife has a much higher score. So does that not matter at all. That is why I posted. I figued it would help the situation for me to be a co-borrower and let my wife be the main buyer.
Click to expand...

Who has the higher income? That's the score that all companies will use...
 
If you can put down 10 or 20%, then you'll have a better interest rate. But, if you can't, you might want to look into a 1/1, 3/1, or 5/1 ARM loan. You'd be paying smaller interest for the first year or two and then re-fi the loan when your credit score starts climbing.

Either way, a 630 isn't horrible by any means. It's not great, but you should still be able to find something out there. Not sure what you debt to income ratio is but hopefully it isn't too bad.

Really though, if you can afford a big downpayment, I would think it would help your chances quite a bit and keep the rate down.
 
You are not going to like this......

But if you have NO money saved to put down, you can't afford a house.
Rent for a year
Save your money grasshopper.........
 
630 is not bad. I've seen ppl with credit score below 600 and they were able to get a loan. Have your wife go as the main borrower, but your score will spike the interest rate. I dont know if you can do 100% financing with your credit score though.
 
Originally posted by: DurocShark
Originally posted by: Codewiz
I do NOT have the be the primary purchaser. My wife has a much higher score. So does that not matter at all. That is why I posted. I figued it would help the situation for me to be a co-borrower and let my wife be the main buyer.
Click to expand...

Who has the higher income? That's the score that all companies will use...
Click to expand...

The companies will look at the lowest score.
 
Originally posted by: woowoo
You are not going to like this......

But if you have NO money saved to put down, you can't afford a house.
Rent for a year
Save your money grasshopper.........
Click to expand...

He might have SOME money, but not enough for a significant downpayment.
In my case, I have less than $1k in my bank account, but if I were to buy a house, I can definately pay for the mortgage. Saving up is the hard part, but it can be done.
 
Originally posted by: woowoo
You are not going to like this......

But if you have NO money saved to put down, you can't afford a house.
Rent for a year
Save your money grasshopper.........
Click to expand...

We have money we COULD put down but we would rather pay a higher house payment. It would only be like 8K. We however do not want to run up credit cards just to put a down payment on a house. Especially when I see some co-workers getting 5.5% interest on a 103% loan to buy a house. We have no issues paying the closing costs and such.

So you are trying to say on 7K gross every month, we can't afford a 1K house payment?

My wife has the highest income. As I stated in the first post 🙂 She has the highest income but lowest employment time.

I am already looking at doing a 5/1 ARM because we know that the average time in a house is around 7 years.

 
On top of the fact that my wife could technically afford a mortgage of 160K all on her own. We are just looking at around 175K. If I didn't have to put my name on the mortgage then that would be fine with me. If it comes to being that big of a thing then we will save 15K so that we can get a mortgage for 160K which my wife can get all buy herself.

EDIT: Also she just got her job so we haven't been able to save a lot of money at this point. Yes we could quite easily. However, in my area I am going to have to pay 1k/month for a decent apartment. My current lease is up in November. I do not want to get locked into another year lease so that we can save for the next six months. We lived comfortable with just my salary. Her salary(my mine however you look at it) is just extra income to us.
 
If you are interested, call my buddy at 1-800-489-8910. Ask for Kris Wilson. He's a good friend and loan officer in TN, although he can do most anywhere. I recommend him because he gets our company rates and service, but is just getting started so he has to close loans. I'm not saying we have the best rates, but he can speak with you and give you an idea of what to expect. He's not going to jack up the rates or try and throw other crap in there. No nonsense, give them what I can so I can eat sort of position right now.

Tell him Jeff E. sent you.
 
Originally posted by: Codewiz
Originally posted by: woowoo
You are not going to like this......

But if you have NO money saved to put down, you can't afford a house.
Rent for a year
Save your money grasshopper.........
Click to expand...

We have money we COULD put down but we would rather pay a higher house payment. It would only be like 8K. We however do not want to run up credit cards just to put a down payment on a house. Especially when I see some co-workers getting 5.5% interest on a 103% loan to buy a house. We have no issues paying the closing costs and such.

So you are trying to say on 7K gross every month, we can't afford a 1K house payment?

My wife has the highest income. As I stated in the first post 🙂 She has the highest income but lowest employment time.

I am already looking at doing a 5/1 ARM because we know that the average time in a house is around 7 years.
Click to expand...

What I am trying to say is that you need cash set aside for the unexpected things.
Like a furnace or roof replacement.
The first couple of years are the worst.
After that you will really know the state of your house.

Consider getting a little less house than you think you can afford.
It will help in the long run
Good luck getting your house.

(BTW my house pmt is $540 I make $60K per year)
 
Originally posted by: royaldank
If you are interested, call my buddy at 1-800-489-8910. Ask for Kris Wilson. He's a good friend and loan officer in TN, although he can do most anywhere. I recommend him because he gets our company rates and service, but is just getting started so he has to close loans. I'm not saying we have the best rates, but he can speak with you and give you an idea of what to expect. He's not going to jack up the rates or try and throw other crap in there. No nonsense, give them what I can so I can eat sort of position right now.

Tell him Jeff E. sent you.
Click to expand...

Will look into doing that when I get off work and have some things together.

BTW, my wife and I did a lendingtree application. We got concerned because we provided everything correctly and we got "pre-qualified" for a 100% loan on a 5/1 ARM at 4.6%. I felt this was pretty good. I just know that "pre-qualified" doesn't mean jack crap. Does anyone know what lenders look at for the "pre-qualified" stuff? I hope they at least get a credit score.

 
Originally posted by: woowoo
Originally posted by: Codewiz
Originally posted by: woowoo
You are not going to like this......

But if you have NO money saved to put down, you can't afford a house.
Rent for a year
Save your money grasshopper.........
Click to expand...

We have money we COULD put down but we would rather pay a higher house payment. It would only be like 8K. We however do not want to run up credit cards just to put a down payment on a house. Especially when I see some co-workers getting 5.5% interest on a 103% loan to buy a house. We have no issues paying the closing costs and such.

So you are trying to say on 7K gross every month, we can't afford a 1K house payment?

My wife has the highest income. As I stated in the first post 🙂 She has the highest income but lowest employment time.

I am already looking at doing a 5/1 ARM because we know that the average time in a house is around 7 years.
Click to expand...

What I am trying to say is that you need cash set aside for the unexpected things.
Like a furnace or roof replacement.
The first couple of years are the worst.
After that you will really know the state of your house.

Consider getting a little less house than you think you can afford.
It will help in the long run
Good luck getting your house.

(BTW my house pmt is $540 I make $60K per year)
Click to expand...

180K is a lot less than we can afford. We never want to be house rich cash poor. The PMI and Mortgage payment is only going to be about $250 more than I am already paying in rent. We have looked and we can pay all our bills including a mortgage on a little over one of our salaries.

As for things breaking, that is what her dad is for 🙂 He is a general contractor. I won't buy a house until he comes down and inspects it for us. I don't give a crap what an official house inspection says.

 
Originally posted by: woowoo
Consider getting a little less house than you think you can afford.
It will help in the long run
Good luck getting your house.

(BTW my house pmt is $540 I make $60K per year)
Click to expand...

I agree with this. My wife and I combine for over $80K/yr and out payment is $579. Love not having a huge payment.
 
FYI, I'd be cautious of getting into an ARM or 80/20 (the 20 would be ARM or interest only). Rates are starting to edge up and I don't see them coming back down again.
 
The PMI and Mortgage payment is only going to be about $250 more than I am already paying in rent.

Don't forget to add in property taxes and homeowners insurance to the total mortgage payment. For me, that added an additional $200+ a month on a $200,000 home (before I paid my mortgage off ) and I live in a pretty low tax area.
 
Originally posted by: woowoo
You DO NOT have to pay Mortgage insurance
80/20 loan
Search the board, It has been discussed before.
Click to expand...

Yes, possible, but then you cant benefit if you eventually pay down 20% of what the house is worth. You can end PMI, 80/20 you can't.
 
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