LONG ( Sorry) Here is my scenario. Experian 679 Equifax 582 Trans ? 3 years at POE..2 chargeoffs from 1997 (sears) (circuit city)..I have 20k in savings would like to buy a town home for about 170 no more than 180k. IMy income is 35k. Total monthly debt is $580 (credit cards and auto)..My wifes income is 42K but her scores are all in the mid 500''s and that is only due to a State Tax Lien which we are clearing up now..Before lien hit her bureau her scores were all in the low 600"s. IHer total monthly debt is $530 a month (car and credit cards). In total we have about $5000 in credit card debt. I don't know if I should pay that off our credit cards first before applying for the loan. My fear is that due to the credit scores we may need all of the money that we have in the bank for a down payment and closing costs. II need to purchase home no later than June but would prefer to do so by April because wife is 4 months pregnant. I know that this is not enough info for anyone to say yes definetly I can get a loan now but can someone PLEASE point me in the right direction..Should I start looking for a home before I get the financing ?? My friend is a broker but I can tell he does not deal with subprime lenders and I I do not want him to waste time pulling our bureaus if we may not qualify now and then have to have them pulled again within the next 4 months.. THANK YOU ANYONE ..
One other question I have is should I contact Sears and Circuit City and negotiate a settlement ?? Or since they are both scheduled to fall off this year should I just leave it alone. I am just scared of wasting inquiries at this time when I I have not even begin searching for a home..I mean I use the internet sometimes but they rarely have any listings in the areas that I am looking for and I am sure there are more homes for sale in the areas that I am interested in....
Are you crazy????? Combined income 77K will support a mortgage of at most 154K under the best of circumstances (no other debt and stellar credit to get the lowest rates). You have neither of the best conditions, so your income will not support the amount of mortgage you are proposing to take on. Pointing you in the right direction: 1: Delay the home purchase till you can afford it. 2: Work on repairing your credit to get a lower, non-subprime rate. 3: Pay off the debt you have. 4: Save more of a downpayment, until you are borrowing no more than 1.5 times income. THEN go looking for a home and financing to buy it.
I have 5100 in credit limits spread across 5 cards..Total Debt on cards are $3800 ..Wife has $2800 in limts spread across 4 cards.and she has balances of $2500 ( She closed 2 accts recently with balances still remaining which of course did not help situation)..II realize that I could pay them off now and bump up the scores by maybe 30 points each but I would prefer not to until Ispeak with a broker who may say I should do something else..II just stressed out and do not want to make any wrong moves I guess..Any ideas on what I probably should do ?
FF has some good advice. If you want to "window shop" try realtor.com. Those home are off local MLS's (multiple listing services).
My wife will be taking 3 months off. I don't need to buy a home in April but I would like to because we are currently getting a heck of a deal on our rent. $740 a month for a 1 bedroom condo. There are apartments owned by the same developer in the next developement but renting a the exact same 1 bedroom apartment from the agency would be $920. A two bedroom apartment would cost $1140 and I would prefer not to have to pay that much in rent if I can avoid it.. I did not include my quarterly bonus which is at minimum 1k but averages 1.5k quarterly and my wifes annual bonus is usually 4k. which does raise our income a bit. We did a prequal with my friend and he stated we could afford 220K...I thought 160 to 170k was somewhat conservative. In MD to buy a relatively nice towhhome in a decent area is no less than 150k. The average townhome is about 200k. New townhomes are averaging 240k. It seems like every 3 months the homes that I viewed prior are about 20k more expensive. Example is that we were looking to buy a new townhome in a cheaper area and they were asking for 190k in August. Now the starting price for that home is 240k ??? So I am panicking a bit because the longer I wait home prices continue to rise and soon may not be affordable at all,..That is one of the main reasons I am trying to rush things..
I also failed to mention that my wife gets expense checks of $100 a week which all in all raises her income to close to 50k but I have been told that she cannot include those checks. Those checks pay for her car payment easily on a monthly basis. So even though I can not include it after we did our bills we realize that a mortgage of about $1200 would be ideal.
dinob I encourage one and all to check out the NACA program if it is offered in your. I don't know where you live in Maryland (Prince Georges, Montgomery, Anne Arundel, or Baltimore), but the NACA program helps make housing affordable for all. I'm currently going through the NACA program in Maryland for Prince Georges County. The program offers the following: --No income limits --No FICO score minimums --No absolute need for good credit (outstanding bad debts must be settled if they appear on your credit report) --No PMI --No Down Payment Requirement --No Closing Costs (That's right $0.00) --Mortgage Rate 1% below whatever BofA or Citibank is offering. Today, current rate being offered is 5.125% for 30 year fixed mortgage. Since program does not require PMI and mortgage rate is reduced, your housing affordability increases. Of course, your current debts play a major part in what you can qualify to purchase. My current salary is $67,000. My monthly credit card debt is approximately $200 per month. With this thought in mind, NACA qualified me for a mortgage up to $260,000 at approximately $1,800 per month for PITI. So, don't be discouraged. If you are in an absolute hurry, then this program may not be for you, as it is time consuming and you play a patient game. BUT, it's worthwhile. Check out there site: www.naca.com. And judge for yourself.
Thank you ..I will check in to the NACA program. A coworker at my job just mentioned today that she used that program to buy a home in PG County.
Just wanted to say that the thumb rule used for mortgage affordability is an amount of THREE times documented annual income, not TWO TIMES documented annual income as stated by Flyingifr. Or at least, so I've been told by my mortgage broker (in 2001). The underlying assumption is that the interest rates do not exceed 7% on 30 year mortgage. By that yardstick, Dino, you can get approved for upto $230K mortgage amount. If you are unable to get prime rates, perhaps that reduces to about 200K.
Thank you LAKPR.. I was beginning to wonder how some of my friends making 80k combined have been able to buy homes that were in the 270K to 280K range if the limit was set at twice the amount of combined household income. This will be our first home and I really do not want to be (House Broke)..But in MD the housing market is very tight..I think it is a joke to pay 220K for a new townhome without a basement but that seems to be the going price now a days..I have found a few older town homes in the area for about 150K to 170K and that is as high as we are willing to go..Thanks again
What area are you in? Often by going out a little farther, you can get a much better deal. If you work in PG County, have you looked at some of the places in southern MD? I'm not talking down by the water, that will obviously be expensive. But what about someplace like Waldorf or LaPlata?
quote: -------------------------------------------------------------------------------- Originally posted by dinob12 LONG ( Sorry) Here is my scenario. Experian 679 Equifax 582 Trans ? 3 years at POE..2 chargeoffs from 1997 (sears) (circuit city)..I have 20k in savings would like to buy a town home for about 170 no more than 180k. IMy income is 35k. Total monthly debt is $580 (credit cards and auto)..My wifes income is 42K but her scores are all in the mid 500''s and that is only due to a State Tax Lien which we are clearing up now..Before lien hit her bureau her scores were all in the low 600"s. IHer total monthly debt is $530 a month (car and credit cards). In total we have about $5000 in credit card debt. I don't know if I should pay that off our credit cards first before applying for the loan. My fear is that due to the credit scores we may need all of the money that we have in the bank for a down payment and closing costs. II need to purchase home no later than June but would prefer to do so by April because wife is 4 months pregnant. I know that this is not enough info for anyone to say yes definetly I can get a loan now but can someone PLEASE point me in the right direction..Should I start looking for a home before I get the financing ?? My friend is a broker but I can tell he does not deal with subprime lenders and I I do not want him to waste time pulling our bureaus if we may not qualify now and then have to have them pulled again within the next 4 months.. THANK YOU ANYONE .. -------------------------------------------------------------------------------- Are you crazy????? Combined income 77K will support a mortgage of at most 154K under the best of circumstances (no other debt and stellar credit to get the lowest rates). You have neither of the best conditions, so your income will not support the amount of mortgage you are proposing to take on. Pointing you in the right direction: 1: Delay the home purchase till you can afford it. 2: Work on repairing your credit to get a lower, non-subprime rate. 3: Pay off the debt you have. 4: Save more of a downpayment, until you are borrowing no more than 1.5 times income. THEN go looking for a home and financing to buy it. Kinda harsh don't you think there flyinfr 7/29/03 TU 689 EX 612 EFX 587 8/13/03 TU 689 EX 668 EFX ???? 9/5/03 TU 668 EX 637 EFX ???? 11/5/03 TU 702 EX 643 EFX 683 12/30/03 TU 703 EX 643 EFX 683 Don't F*ck with me, I F*ck back
"Combined income 77K will support a mortgage of at most 154K under the best of circumstances (no other debt and stellar credit to get the lowest rates). You have neither of the best conditions, so your income will not support the amount of mortgage you are proposing to take on. Pointing you in the right direction: 1: Delay the home purchase till you can afford it. 2: Work on repairing your credit to get a lower, non-subprime rate. 3: Pay off the debt you have. 4: Save more of a downpayment, until you are borrowing no more than 1.5 times income." Damn if thats the case ...I will never own a home .... My "wife" (2 more months) earn about $140 combined. But I live Long Island, NY you cannot touch anything for under $350k ... so If I go by your estimation ..I should put a down payment of about $150,000 hmmmmm and i thought i would of been able to afford a house ..but guess not ...I going to stop looking now...
don't look at it from the "three times your income" standpoint because with interest rates low, you can borrow much more. figure your gross monthly income. you do not want your housing payment (piti and pmi) to be more than 28% of that gross amount. next take 36% of your gross monthly income. you do not want your total debt (including house payment) to be more than 36% of the gross monthly income. using online mortgage calculators and current interest rates, figure how much you can afford. these ratios are conservative but will give you an idea. also, sit down and figure out how much you feel you can afford and compare it to the 28% payment above.
Going back to the original post........my suggestion is to look at NO houses in the next 2 months. I suggest paying off your credit cards or at least paying them down quite a bit. If you have a baby coming I am thinking that the costs of a new home and all the goodies for the baby is going to be a big strain on the family. You feel the urge to buy now....and I totally understand what you are thinking. A baby room to paint, a home for your child...all of these are wonderful ideas. Finances stress a marriage.....if you are hurried (which is seems you are) and worried about not having enough money (which it seems you are) then you probably aren't ready for your home just yet. Work your buns off to get the scores up and the debt down so you dont even have to think about the subprime way. There are lots of good solid conforming programs out there that most people qualify for yet end up with a sub prime loan. Be patient and take the time to do it right.........rushing into things hastily and not taking the time to do things right is exactly how I ended up with my first child......congratulations btw...the fact that you're willing to ask for help is a good trait to have as a Dad.
dinob, Listen, I was in almost the same situation, minus the baby :}. 3 months ago I wanted a house. Had reports, wife and I, that looked like crap. Low 500's for both of us. Here it is 3 months later with at least 100 hours doing my own repair. Now my wife is 650 fico, I'm at 625. I paid down my debt and am ready for our mortgage. My lender 3 months ago only offered 8.5% with a 20% down! I'm getting a VA loan at 6.5% with no money down! I could get an FHA or a fannie mae if I want. I'm 3 years post BK and had 3 collections. Our tri-merge was 27 pages long with over 25 incorrect tradelines. I deleted at least 17 derogatory lines with 2 last week. Listen to others advice and wait. Pay your debts off!!! Start repairing your own credit as well. In 90 days you will see a big change. I spent many, many many nights, doing my research and repairing our credit. it wasn't easy, but well worth it. Mitch
Have you had deletions with collections agencies? What technique did you use to have them deleted? I am having a tough time with LJ Ross. They are a check verification company and they keep reverifying the stuff even though they have been paid off for about two years now.
