Mortgage questions......

[Garet Jax]

Originally posted by: Codewiz
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?

Codewiz,

I would recommend not buying a house based on both salaries if at all possible. This will help to insulate you because if one person loses their job, you are still good. Also, it allows you flexibility in the future to change careers, have children and save money for retirement.

I know a couple of bought a beautiful house with both their salaries. They settled down to have kids and realized they can't without selling their house because they can't afford to have either one take time off. Very sad.

 

[woowoo]

Originally posted by: KMDupont64

Originally posted by: woowoo
You DO NOT have to pay Mortgage insurance
80/20 loan
Search the board, It has been discussed before.

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.

I don't understand your post.

If you go 80/20 then build up 80% LTV then you can refi and go with a conventional loan.

Have you ever tried to get the bank to end your PMI?
It's like pulling teeth.

 

[Garet Jax]

Originally posted by: Codewiz

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

This is because the mortgage companies are pushing for this. It is like the diamond companies pushing for 2 months salary for an engagement ring.

After 7 years of paying only your monthly mortgage you typically have less (sometimes much less) than 10% of the principle paid off. It is best to try and buy a house than you want to stay in for longer than 7 years. Even just a few years extra will make a world of difference in the principle pay down.

 

[dquan97]

My situation is similar to yours, but we have only one income-mine. Gross $3,600/month, wife works part-time @ $700/month. Homes around here go for $200K minimum, so we'll probably buy a condo for $180K and hold it for about 5-7yrs, when we look to upgrade to a house. Good thing working for us is that we have $12K in savings, which we can put towards a downpayment or keep it for emergencies.

 

[Codewiz]

Originally posted by: Garet Jax

Originally posted by: Codewiz
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?

Codewiz,

I would recommend not buying a house based on both salaries if at all possible. This will help to insulate you because if one person loses their job, you are still good. Also, it allows you flexibility in the future to change careers, have children and save money for retirement.

I know a couple of bought a beautiful house with both their salaries. They settled down to have kids and realized they can't without selling their house because they can't afford to have either one take time off. Very sad.

Well right now, I work for the federal government. In or around January when I get the cost of living increase and I receive my recent raise, I will be able to totally afford the loan by myself. So if my wife did lose her job then we would be fine.

Keep in mind that my job is probably one of the most secure around.

Could we wait 3-4 months? Yeah technically but why should we? We will have to move to another new apartment. Sign at least a 6 month lease and pay $100 extra a month because of the six month lease. All so that I can technically afford it only on my salary.

As for not moving. The house we are looking at isn't big enough to raise a family in. So we can't stay more than 7 years. We plan to have two children. We will have to move on to a bigger house. That is why I am going to with an ARM. I want to get more principle paid off in those 7 years so I can use towards a new house. I don't plan to sell the house, I will refinance at a higher rate and rent it out.

 

[DurocShark]

Originally posted by: FrustratedUser

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.

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

The companies will look at the lowest score.

Not Ameriquest. While the coborrower's score is added to the mix, the primary score is the person with the most income.

Argent and LBMC do the same thing, and I assumed 🙂Q) all sub-prime companies did the same...

 

[petejk]

<inserting southern california real estate rant here>

 

[IBuyUFO]

Originally posted by: petejk
<inserting southern california real estate rant here>

Well, I have a northern california real estate rant! Can't afford squat!