Financing in Shasta County>Question Details

Loconn55, Home Buyer in Belleview, FL

My daughter has 610 score,$20K debt(9K college loans,11K hospital/cc) needs a loan for a $90K house.Has $40K DP. Prvt.lender sez Int.OnlyLoan.True?

Asked by Loconn55, Belleview, FL Sun Dec 16, 2012

25, with medical problems, lost her job so had to quit college, working min. wage for last 2 yrs., living @home and couldn't pay off debts. Just sold her first novel in a two-book deal to a major publisher for $200K -- she gets it in 3 installments and wants a house that's up for sale now; owner won't wait past Feb. Should she pay down debt or... to possibly qualify for a decent loan? She's talking to a private lender about an interest-only 5-yr loan, and that scares me. Thanks for any advice you can provide. I want my Cinderella to have a home! ;-)

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Randy Bettis’ answer
You don't disclose her current monthly payments on her debt vs. current income. FHA, USDA and conventional loans have debt-to-income ratios that limit one's ability to borrow. With a 44% down payment she might get an exception (as that is considered a substantial down payment) The approx. payment on the 50,000 would be about 358 (PITI, principal, interest, taxes & insurance) if her total debt to income is less than 40% (including the house payment) she may qualify on an exception.
She could also partner up with a stronger borrower, or look into a USDA loan (which essentially is not FICO driven. Good luck . I would strongly advise against the interest only hard money loan.
0 votes Thank Flag Link Sun Feb 17, 2013
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