Myself and my fiance will be looking for a home in about two years. My FICO scores are in the mid 600's. We just ran my fiance's scores from all three CB's and she all her scores are in the mid-700's. She her scores run from 730-750. Can anyone tell me how the lenders will look at this??? We will be first time buyers. Never late on any rent. I have two negative marks that I will dispute and hopefully get off by the time we apply, but will the lenders combine our scores or take the best score or take the worst score?? What will they tell us??? THanks s
Since this will be your first home I would probably go FHA. Score wise you should have no problem getting approved at a prime rate. The good thing about FHA is that they offer several different loan programs that will best fit your needs. So if you only have 3% to put down FHA will work great for you. The only other thing to strategize is your household income and debt load. Depending on these, I don't see any foreseeable problems for you. Good luck. Dani
Will you have tied the knot by then? Sometimes, lenders will look at combined income and the highest score of the couple, but ya' gotta be hitched for them to do that... FHA is a great route to go, be sure to check if your local community has any incentive programs for first time homebuyers. Best of Luck, Dancer
While FHA can certainly be an option, if your scores remain in the range that you both are currantly at, there are superior options available than FHA. There are expenses that can actually drive your loan costs up by a couple of thousand dollars. FHA is really best for those people that have good credit(scores) but are lacking in the DP area. There are conventional programs that will allow you to get in a house for very little down and some do not require PMI(this is required with FHA). A conforming(conventional) lender will take the score of the person who provides the largest percentage of the income, whomever that is. If both your scores are in the range that you described, then there should be no problem. Also, you may want to consider if her income will support the loan or if yours will solely, then you may be able to singly get the loan even though both of you are on the title and in some states also on the mortgage if married. Basically what I am trying to show you is that you will have options and choices that may be more to your benefit and you should investigate them before deciding on a mortgage. Another thing to consider, depending on where you live is price. FHA has a limit on the maximum they will lend and in some areas that will not buy you much house. For example, it is almost impossible to get an FHA loan in Silicon Valley because of the price of the houses there(somewhere around 800K for a median I believe). Good luck and I hope this helps. fla_tan
I agree with this. Usually if you go FHA, the interest rate is slightly higher than conventional, and there are more fees. You can go conventional and still put 3-5% down (the minimum depends on the lender). As a first time home buyer with a middle score of about 640, I chose conventional with 3% down. The more you put down, the less PMI you have to pay. Some lenders will even let you piggyback a 1st and 2nd mortage to eliminate PMI. Your 1st mortage will equal 80% LTV, the second will cover 10-15%, and you would have to put down 5-10%. If you can afford the down payment, I personally think this is the way to go. I couldn't afford the downpayment so I'm stuck paying PMI.
Has your house appreciated enough for you to reach 80% LTV? Then you can have it appraised and force the mortgage company to remove the PMI. Dancer
There are several lenders that make it VERY dificult to remove PMI even at 80% and unfortunately there really is no absolute requirement that they do so at 80%...that is simply a federal guideline for removal of PMI fla_tan
The law is that they HAVE TO remove it when you pay you original note down to 80%. There is no requirement for them to do so if it appreciates to 80% LTV, unless you get a licensed and bonded appraiser to perform an appraisal out of your pocket. Once you have that, they are required to drop it and your state Attorney General's Office will be glad to help ensure their compliance. I agree that most mortgage companies make it difficult, but I found that the state AG's office calling them yields a rapid change in attitude. Dancer
Doesn't removing the PMI once the home reaches 80% LTV only pertain to homes that were purchased after the law was passed in July 1997? It is still very difficult for homes that were purchased before then (at least those owned by greedy mortgage companies) to have the PMI removed. Usually, if someone is having trouble with getting their PMI payments deleted I tell them to see if their loan is through Freddie Mac/Fannie Mae (this is after you have had an appraisal done and the home is carrying at least 20% equity). They (Freddie Mac/Fannie Mae)love hearing about these things and usually take care of the problem shortly. Dani
I'm not positive, but I believe the law applies to all mortgages regardless of their date of origin. Dancer
I don't want to sound like I'm trying to drum up business here (just like someone else stated in their reply on another post), but there are so many options that are available, even with bad or marginal credit, that it'll make your head spin. I had a problem getting a mortgage because I had late pays on a current mortgage, and even though my scores were good, I couldn't get a loan because of those lates. Yes, I tried disputing this and that, but nothing seemed to work. I posted this url on another thread and I don't want this to be thought of as spamming the board, but it's because I know these guys can work wonders...legally, and I know others here can benefit from this. If you have ANY credit problems or are questionable about whether or not you can get a mortgage, go to www.loansearching.com . These mortgage lenders know their stuff, and it is well worth anybody's time to contact them to discuss financing or refinancing. Bad credit is their specialty, so there is no need to feel embarrassed. If anything, they'll at least let you know what you need to do to get a mortgage.
