"Mortgage Question" Help..

Discussion in 'Credit Talk' started by jsummers, Sep 4, 2003.

  1. jsummers

    jsummers Well-Known Member

    Here is my situation..

    Looking to purchase a new home. My soon to be wife, is still going through her divorce. She has two children..a pissy X husband .. and we are in a two bedroom townhome.. and our 10 year old boy is going to kill his baby sister if we dont get a bigger place soon..lol

    We have approx 50k to put down on a new home.

    My situation is as follows.
    Employed full time past 10 years same job annual income 46k
    average FICO score is 695
    Zero credit card debt
    710 Auto loan payment .. 72 months.. 11 months paid on time so far.. I KNOW I KNOW.. I am a idiot.. :(
    2 year mortgage payment history of 1036.85 and a perfect homeowners assocition monthly fee of 108 paid monthly for the past two years never late


    Her situation.
    Currently a at home mom and has been for the past 5 years.
    Filed BK7 discharged in 1999 due to medical bills.
    Current FICO score are in the 550 range.
    Has lates pays recently on both credit cards and her mortgage..
    She does have about 5 current open tradelines with several years positive payment history from me adding her as a AU to my credit cards.
    No collection accounts on record.
    Estimated child support to be recieved is 650 per month

    We are looking to purchase a home in the price range of 200k to 215..

    My questions are..

    Do I make enough to pull it off myself or is my auto loan killing me like I think it is.

    If I need to add her for additional income (childsupport) are her scores going to kill any chance of a prime rate mortage

    If I would not qualify for a 160k loan by myself, what would be a estimate on the amount I could borrow with my current financial obligations

    Thanks again everyone..
     
  2. jsummers

    jsummers Well-Known Member

    Additional info, sorry I left it out

    250k life insurance
    Short and long term disability
    Retirement fund with about 10k in it..

    Dont know if this stuff matters.. but thought I would add it.
     
  3. SoParkDiva

    SoParkDiva Well-Known Member

    I see no problems with you qualifying for a new home if you are looking in the $165-200k range. If you have at least 10k in your retirement fund you can use that as money in reserves to show the bank that you can pay if you fall on hard times. I would not put 50k down on a house unless monthly payments were an issue.

    According to Wells fargo, each $1000 down accounts for $5 off your monthly payment. Therefore, $50k = $250 off each month. I would rather you invest that $50k for the children's future.

    Here's a link where you can find daily mortgage rates and information on different loans that don't require money down. With a middle score above 680 you would easily qualify for a 80/20 loan with no money down.

    A 80/20 interest-only loan is also an option if you want to save money for the first few years and you have 10k in reserves. You would pay the interest only on a $200k loan which would make your monthly payments $1000 (not including homeowner's assoc. fees).

    You would not have to pay PMI on this type loan. The mgt rate is adjustable but you could always refinance in a few years to lock in a mortgage rate.

    This type of loan is great if you wish to pay off your car note first and you expect your new home value to increase at least 5% in the next few years. You may also want to look into getting a 15 year mortgage. You could pay an extra $100 a month and the home is yours in 10 years!! :)

    You might not want to use your wife's credit history based on the fact that her scores are low and she has no recent employment.

    Good luck :)
     
  4. jsummers

    jsummers Well-Known Member

    But with a yearly income of only 46k and total monthly debt being 710 for a auto loan..

    Would I qualify for 150,000 loan on a 200k home with 50 k down..

    I am really concerned with the ratio thing.. I know I am way up there cause of that..


    By the way.. Thanks so much for taking the time to write that information, I will for sure check into all of it..
     
  5. Hedwig

    Hedwig Well-Known Member

    Go to a good mortgage broker (get recommendations from people you know) and talk to them. Be honest. They'll tell you what you qualify for. You may want to look at an FHA loan. You can get them with as little as 3% down. I wouldn't try to pay extra right now. Get the biggest mortgage you can afford and put the rest of your money away for all of those emergencies that come up (seemingly all the time). When you get more money saved and feel comfortable with where you are, you can pay more or refinance. If you have a real emergency, that $50K can be used for paying bills (including the mortgage). If it's tied up in the house and something happens like loss of a job, you can't get it out.

    Yes, you'll pay PMI. But better to pay the insurance than to put everything you have into the down payment (just to not pay the insurance) and then not have the money for an emergency. Would you want to risk losing your house or not being able to pay bills in an emergency to save a hundred or so dollars a month?
     
  6. JessRabbit

    JessRabbit New Member

    Not a mortgage expert but financially doesn't it make more sense to use that 50K to pay off your auto loan so that you have an additional $800 a month to use to pay for house/bills?

    Just throwing that out there,
    Jessica
     
  7. SoParkDiva

    SoParkDiva Well-Known Member

    What Hedwig and I are trying to say is do not sink $50k into a home. Save that money and invest it. If you are worrying about being financed for a $200k home I have already explained to you that you can get financing with no money down and still have attractive monthly payments until you refinance and lock in a rate.

    There are many creative loans out there that fit right into your budget even with no money down.Your middle score is good and your annual income (gross, not net) would qualify you for a home in that range. Talk with a good mortgage broker and see what's best for you.
     
  8. lbrown59

    lbrown59 Well-Known Member

    If it's tied up in the house and something happens like loss of a job, you can't get it out.
    Hedwig
    ======================
    Yes he can get it out.

     
  9. lbrown59

    lbrown59 Well-Known Member

    No
     
  10. lbrown59

    lbrown59 Well-Known Member

     
  11. SoParkDiva

    SoParkDiva Well-Known Member

    Re: Re: "Mortgage Question" Help..

    True. There are some places like the ghetto or on a indian reservation where you can find a new home for 50k :)


    But seriously, you can find a really nice home for around $80-100k and put that 50k down on a 15 year loan. Pay a little extra a month and have that hme paid for in 10 years.

    Think of all the equity you would have in that home if the value increased 20% over that 10 years. That's something to think about.
     
  12. tmitchell

    tmitchell Well-Known Member

    Re: Re: "Mortgage Question" Help..

    Hey Diva....

    You never seem to outdo yourself. What kind of assinine comment is that??? I recently moved from a house I could have purchased for $50k and I didn't come from a ghetto. I seriously doubt he meant "new" as in "new construction".

    Keep your snide comments to yourself.
     
  13. SoParkDiva

    SoParkDiva Well-Known Member

    Re: Re: Re: "Mortgage Question" Help..

    I don't know what area you are from but there are no $50k homes old or new in Atlanta or the surrounding suburbs that are not in the ghetto.

    *smooches* :)
     
  14. Thee One

    Thee One Well-Known Member

    Re: Re: Re: Re: "Mortgage Question" Help..

    I live in what most would call the ghetto, and you'd be hard pressed to find a house less than 100K here. I'm in Chicago. Not a flame, just a fact...I've been looking.
     
  15. tmitchell

    tmitchell Well-Known Member

    Re: Re: Re: "Mortgage Question" Help..

    My point exactly - you DON'T know where people are from so assuming they live in a ghetto just becasue their homes go for $50k is wrong.

    I came from the Northeast section of Philadelphia and it was quite nice - far from a ghetto.
     
  16. SoParkDiva

    SoParkDiva Well-Known Member

    Re: Re: Re: Re: "Mortgage Question" Help..

    How many years ago was that? This is a message board and you have no right to tell me what to post. If you don't like my posts you are welcome to ignore me. You won't be hurting my feelings.

    Maybe I should have said economically depressed area. There, does that make you feel better? :)
     
  17. lbrown59

    lbrown59 Well-Known Member

    Re: Re: Re: "Mortgage Question" Help..

     
  18. jlynn

    jlynn Well-Known Member

    LB are you trying to bait the Diva into a trailer trash discussion? :)

    (Some of us do remember your infamous sig)
     
  19. jlynn

    jlynn Well-Known Member

    I just got this in email today. He is our personal accountant, and a pretty sharp guy. Has a mortgage affordability calculator on his site that might help you get started:

    www.planaheadwithed.com
     
  20. lbrown59

    lbrown59 Well-Known Member

    quote:
    --------------------------------------------------------------------------------
    Originally posted by lbrown59
    I can buy a new home for 50K so I would pay cash for it and forget about the loan.
    --------------------------------------------------------------------------------
    1*True. There are some places like the ghetto or on a indian reservation where you can find a new home for 50k :)
    2*But seriously, you can find a really nice home for around $80 and put that 50k down on a 15 year loan.
    3*Pay a little extra a month and have that home paid for in 10 years.
    4**Think of all the equity you would have in that home if the value increased 20% over that 10 years. That's something to think about.
    SoParkDiva
    ===================
    1* This home isn't one of them.
    2*Why put the 50,000 into this deal and take out a 30000 loan for 15 years, when you can pay 50000 cash for a home then take the 30000 from a loan put it in a side fund and have instant equity in the home.?
    3*Why do that when the home can be paid for instantly?
    4*There are two serious drawbacks to home equity . Can you or anyone else tell me what they are?

    THE END ** *** ** LB 59
    """"```--~~~~~~~~~--```'""'''
    PS: - - Which is better to have?
    50000 equity in a home or 50000 cash on hand?
     

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