we are trying to get a loan to purchase a new home my score is 605 and his is 650.The question I have is what is 100% financing? does that mean you do not have to put money down. This will be are first time at owing a home.Right now we pay $800 a month rent for a house and that is too much when we can try to purchase one.Is our credit scores decent enough to get approved or should we wait til they get higher.Any tips would be helpful...Thanks..
Teesha Who makes more money, you or your husband? Some of the conventional lenders have programs to lend up to 100% while allowing the seller to contribute up to 6% of the closing costs. These loans essentially allow you to get into a home with almost no money out of your pocket. To qualify for 100% you would need a middle score of at least 620, though you can get a 97% loan with as low as a 580 middle score. In addition, there are non-profit organizations that will provide down payment assistance in certain scenarios. It would be very dificult to try to give complete answers in a short response. But I hope that this gives you an idea that there are sources out there. [again disclaimer... not all programs are available in all states and you do have to qualify to participate] fla-tan
I have a 20% "KICK BACK" of interest on FEDERAL TAXES (MIC~MORTGAGE INTEREST CREDIT) so I could qualify for a larger house...
Teesha, My wife and I are in almost the same exact situation! We live in California - so I don't know if it's the same in your area - but our mortgage broker said we would qualify for an FHA loan with a 3% down, and that it could be covered by the seller. At least here in Northern California, the housing market is really tight, especially for homes under $200K, and it's not uncommon for owners to receive cash offers of $10-15K over the asking price the day their house on the market - so it may be hard to find a seller who'll go for that (depending where you live). You may be able to negotiate a higher-than-asking-price offer in return for the seller paying closing costs, though. Basically, their cash becomes liquid when the sale is final, and they still end up with the same amount as if they didn't pay the closing costs, and they can get the house sold sooner (if it's a slow market). What you end up with is a higher mortgage (and slightly higher payment), but less up-front costs to get into it - so you can get into it sooner. Our mortgage broker didn't get a loan for us yet, but he's been in business in our area for over 20 years, and is very reputable, and he said we would get around a 7% rate based on our scores, and that scores over 600 are qualified for 3% down FHA loans. My score is 637, and my wife's is 609. I make roughly 70% of our income, and my wife makes around 30%. He *did* say that we would have to have any negatives on our reports either explained or removed when we applied for the mortgage, though. We don't have any lates within the last 12 months - he said that that's a major factor, even with other stuff on there. I'm trying to get everything I can removed within the time it takes for us to save up the $8K down+closing for our house. Best of luck to you in your quest for your house, and if I find out anything more, I'll let you know! -Dan
PMI is totally seperate...(seller paid, lump sum at closing) I just get a special form and figure 20% of the paid interest for the year ending 12/31 and the other 80% goes on SCHEDULE A. PMI is NOT listed on the form as far as I know...
