For instance, you say you are a first time home buyer. We have a program that you might qualify for. It requires a 5% Down Payment. There is no mortgage insurance. All funds including the Down Payment, yes, even the DP, can be gifted from a relative. Even though we collect extra escrows at closing for taxes and insurance, the first payment is not due for at least 4 months after closing, i.e. close in May, the first payment would not be due until October 1. The maximum loan amount is $417,000. FHA in the Metroplex can only have a base loan amount of $271,050.
The following is a comparison based on a purchase price of $150,000. Rates used are for example purposes.
FHA Example - Interest rate of 3.625%. Prin. and Interest is $671.69. Monthly mortgage insurance is $150.78. Total of the two is $822.47.
BBVA Compass FTHB - Interest rate of 4.500%. Prin. and Interest is $722.03.
That's a difference of $100.44 a month. Sure, it may cost a little more at closing, but without having to make a payment for 4 months (it would be 1 month on FHA), and saving $100 a month, it wouldn't take long to recoup the costs and be ahead of the game.
AND, depending on your income, you may also qualify for a 3% DP loan, also with no PMI, and again, all the funds including DP can be gifted.
Do your homework. Get educated on what exactly might be the best program for you, but don't just jump into doing an FHA loan as it might cost you more in the long run. Then proceed with purchasing a home.
Feel free to contact me if you have any questions.
There are other loan types that might work for you as well.
We need to get you with a great loan officer like Bill Merritt below and take a look at the whole picture, visa, job, DTI, reserves, income source, and see if we can get you a loan. i don't think it is a waste of your time if you really want to buy. That's the very first step.
As others have stated - yes - with a FICO of 700 - you should not have difficulty.
Your first step is to meet with 2 or 3 Mortgage Brokers/Bankers to see what they can offer you.
Then get a Pre-Qualification letter or even better an actual Pre-Approval letter from a Lender.
If you have these - Sellers will know you are a serious Buyer.
With regard to your Down Payment issue - yes most Conventional Loans will require a down payment
of at least 15-20% of the purchase price I'm afraid. Yet - FHA only requires a down payment of 3.5% !
The reason why Banks and Lenders have upped the Down Payment requirements from the Housing Bubble is that they are shifting the "market risk" in properties from the Lender to the Borrower !!!
This also eliminates the likelihood of people becoming "upside down" again, or owing more than the property is worth at any point in time.
Anyway - sounds to me like you are on the right track - keep it up !!!
Best wishes -
JAY NAREY ABR, ALHS
Keller Williams - Preston Rd.
â€¢ 580 Platform
â€¢ we also recognize alternative trade lines
â€¢ less overlays
â€¢ in house funding, processing and underwriting
â€¢ 620 credit on conventional
â€¢ 47% DTI ratio or lower
â€¢ 3.5% down payment
â€¢ close the average loan for Refi /new purchase in 21 days
You'll have a lot of difficulty finding lenders in that range.
No one seems to have answered your question, though. Except Ed from Klamath Falls. His 40% is slightly below the normal maximum of 43%. While some lenders may allow up into the 50s, they are much harder on borrowers than those with lower DTIs. And, I assume that the DTI is your current ratio, meaning it will only get worse when you take out a loan.
I urge you to reduce your debt and look around before committing to buying anything with such a ratio. Refinancing might help, but if you're a first time buyer, you can't exactly take out a HELOC to reduce the monthly payment.
I'm not really interested in revitalized neighbourhoods or the HUD program. Thanks, though!
I'm not in a hurry to buy either. I just wanted to know if there was any credit/grant/help for teachers or first time buyers to get a downpayment, considering that there are options allowing 3.5 - 5% only in case I could get a good deal.
I'm checking my options. I read about CHIP loans with 100% financing and "no PMI" but I didn't like loan conditions, LPMI, etc. I'm not convinced with FHA either. I have a credit of 715 (checked 2 days ago) that should go up a bit since I'm about to finish paying for my car and another small personal loan next month. I think I can get better options if I keep saving.
Anyway, I followed everyone's recommendations and I contacted a real estate and three lenders. Apparently the combo "H1B + teacher" is not really popular. The real estate agent said "no foreign nationals" and the other 3 people wouldn't even discuss numbers with me due to lack of down payment at this point. Ah well.
Again, thanks a lot for your wisdom! I've learned a lot from this forum, being able to focus my research.
FHA requires 3.5% down payment and potentially another 3% in closing costs.
Checkout this link:
You might also check this out:
I think you can move forward with preapproval and let us know if we can assist you with the home search portion. We'll work to get you all the discounts for which you qualify.
You can search for homes at the link below:
Faizur Rahman, Ph.D.
SFR ABR CIAS
Real Estate (Realtor) and Mortgage Broker/Owner
Bengal Brokerage LLC and DBA Bengal Mortgage
2070 W Spring Creek Pkwy, Suite #314, Plano, TX, 75023
Phone: (469) 766-4015, Fax: (214) 764-4047
NMLS ID: 351183
TREC ID: 0573317
Thanks again for your assistance!
NMLS # 6395
Financing Kentucky One Home at a Time.
This is a very good question. Now is a good time for you to start looking for a home. With a credit score of close to 700 and a pretty good DTI, you could get pre-approved with no problem.
As for your downpayment, There are a few programs still out there that can assist you with your downpayment. I think a good place to start would be HUD's $100 down payment program. I've included a link below.
Please feel free to reach out to me if you would like to speak more in detail about your options. I would love to assist you in any way I can. Thanks for the question!
Scottie Smith, II
Scottie Smith, II & Associates
Real Estate Advisors
Buy | Sell | Rent | Invest
"All Things Real Estate"
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
Search Dallas area MLS for FREE. No registration => http://www.ntreisinnovia.net/cgi-ntr/BR_login?0501134
Give me a call when you can to get started
Kevin D. Brown
Owner/ KDB Properties