Financing in Harbor City>Question Details

Antonio, Home Buyer in Harbor City, Los Ang...

What are my chances of getting my fha loan approved? I plan on putting down 5.1% and upward of 10% if necessary.

Asked by Antonio, Harbor City, Los Angeles, CA Sat May 26, 2012

Been on my job over three years full time. After putting down my earnest money deposit of 3.5% ($11,375 i believe) I have about $36,000 leftover. The seller has agreed to pay 5,000 towards closing and with lender credit I have about a $4,000 overage. A family memeber is also willing to gift me $7,000 if necessary. I have a 734 middle score and absolutely PERFECT credit, no late pays, bankruptcies, etc. My 2010 income was 64,000, and 2011 77,000, my current ytd for 2012 is about 27,000. My current gross monthly income is about 4,600. I am currently under contract for a home that cost 325,000 which is fha approved. I have ZERO revolving debt, with my credit and income what are my chances of getting approved? Thanks

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Richard "RJ" Kas’ answer
All looks good, but you really should speak directly to a loan broker specializing in FHA. Based on what you are stating, you can get a concrete answer the same day. Good luck. If I can be of service in finding you a property, once you have your PreApproval Letter in hand, please contact me. Thank you.
0 votes Thank Flag Link Mon Jun 11, 2012
You "sound" great on paper...shouldn't have any problem. But...why go FHA at all? With your numbers, you can also consider conventional, which may make your offer more attractive to the seller. (Is this a condo?).

You of course, need to talk with a lender, to obtain your pre-approval letter to submit with your offer. One of my "go-to" lenders is Jin Hee, with Prospect Mortgage (213-300-0618)...she will welcome your call and be happy to answer any questions.

And, by the way...where is your sharp-shooter Buyer's Agent? Don't tell me that you're being represented by the same agent that is representing the Seller...?! Don't do that. Work your buying strategy out with your OWN representation, a Buyer's Agent that reps only your interests. Not the seller's agent, who will tell the seller every word that you say about your situation...as they are contractually bound to do.

Call me if you want to ask any further questions. And best of luck buying your first home!

Jayne Clement
Keller Williams Los Angeles
Cell) 213/309-5005
DRE# 01877738
1 vote Thank Flag Link Sat May 26, 2012
Zero down conventional financing is available:
Structure: 5% gift + 95% mortgage; if you have good credit (720+ scores),
this would probably allow you to buy more house (higher purchase price) - because
the MI (mortgage insurance) would be significantly lower on the convention loan.
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al.rodenburg@flagstar.com (281) 236-5743
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0 votes Thank Flag Link Sat Jul 12, 2014
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Regards
Eric Jones.
0 votes Thank Flag Link Sat Apr 19, 2014
Hey Gregorio,

Thanks for your comment. And you're right, since he's not self-employed, he seems to qualify for fha alone.

Good service!
0 votes Thank Flag Link Sun May 27, 2012
Gregorio,

Once again, thanks for the input. I'll have a better idea next week of where we're at regarding getting the loan funded. The file was submitted to Nations Direct Mortgage who is suppose to be good with fha loans with a quick turn around. Now this may all be "broker speak" but only time will tell. If this lender falls through I'll be seeking the assistance of another broker with another newtork of lenders. I'll keep you in mind if this lender falls through. Thanks.
0 votes Thank Flag Link Sat May 26, 2012
Antonio,

FHA does allow higher DTI with compensating factors. I don 't know if you will be approved or not without seeing your application but I can tell you that seeing a DTI in the high 50's is not uncommon with FHA.

Agents that tell you to speak to a real estate agent to get a mortgage opinion are doing you a disservice, especially ones that don't even know that gross income is used instead of net.

Note that most NMLS licensed loan officers in California that actually know what they are doing also have a real estate license anyway so it only makes sense to ask the people who understand the entire transaction.

If you have a good lender you are working with now, they should be able to get it done fro you.
0 votes Thank Flag Link Sat May 26, 2012
Cindy,

I did submit my file to a broker who ran it through an automated underwriting system and it was approved (for a conventional loan). Once the underwriter began verifying the supporting documents (W2's, pay stubs, etc) it was determined my dti was too high for their comfort level which prompted myself and my broker to submit my fille to an fha lender. He says I shouldn't have a problem getting fha approved with compensating factors such as credit (middle score 734, high reserves, and job history) but I was told this before. Approved via the automated system only to be denied once manual underwriting enused. My feedback has been a mixed bag, looking for something more concrete. Perhaps a lender that works with higher DTI's.
0 votes Thank Flag Link Sat May 26, 2012
It all sounds good...my question is...hav e you completed a mortgage application and given it to a mortgage broker? You need a lender to review your finances one to one and run your application through underwriting. That is the only way you will find out if you qualify...

Good luck.
0 votes Thank Flag Link Sat May 26, 2012
Douglas,

I will definitely continue to seek the opinions of experts. Thanks for the insight.
0 votes Thank Flag Link Sat May 26, 2012
Antonio,
Just to clarify, are self-employed or wage earner?
Flag Sat May 26, 2012
Antonio,
I would recommend you to talk your real estate agent to get a second professional mortgage opinion because there are many loan agents that promise and don't deliver. This happens frequently. The numbers don't lie and it has to make sense to the lender.

Best of luck!
0 votes Thank Flag Link Sat May 26, 2012
Gregorio,

Thanks, I appreciate your input and your offer for assisting me. If the current lender/mortgage broker I am working with now is unable to approve the loan I will definitely drop you a line. If you say it can be done I believe you. We'll see what happens.
0 votes Thank Flag Link Sat May 26, 2012
Antonio,

Based on the information you have given you will most likely be approved.
It is in fact your GROSS income that is used for DTI and not your NET income.

If you have any problem getting approved, give me a call and I'd be happy to assist you.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Sat May 26, 2012
For that purchase price, I think you might need a co-signer who has no real estate liability and with a qualifying income and credit.

Lender uses net income to qualify. And by the way you don't need to exhaust all your down payment; 3.5% will do it unless you would put like 20% down.
0 votes Thank Flag Link Sat May 26, 2012
I was also under the impression GROSS income was used to determine dti not net income. I could be wrong however.
0 votes Thank Flag Link Sat May 26, 2012
Jayne,

Yes it is a condo (townhome). I tried the conventional route and didn't get past underwriting due to high dti. With an fha loan dti are generally a little higher compared to that of conventional loans. I figured with compensating factors such as credit and down payment with the conventional loan I'd be okay. Fha allows me to keep more money in my pocket for reserves and as previously mentioned allows a higher dti ratio.
0 votes Thank Flag Link Sat May 26, 2012
Douglas,

Monthly net income of a little of 3,000 a month
No other real estate or property liability
No foreclosures or any other negative marks regarding credit
Yes, i do have an agent representing me.
0 votes Thank Flag Link Sat May 26, 2012
Antonio,
You're missing some items:
1) What's your monthly NET income?
2) What has been your yearly net income?
3) Do you own any other real estate property or liability?
4) Any recent foreclosures?
5) Do you have an agent to represent you in this purchase?

I could help you and refer you with a reliable and experienced fha loan agent.

Douglas Perez
(213) 375-8741
0 votes Thank Flag Link Sat May 26, 2012
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