Home Buying in Rockwall>Question Details

Lucy Rangel, Home Buyer in Fate, TX

Are the credit criteria really getting harder on obtaining a mortgage loan?

Asked by Lucy Rangel, Fate, TX Fri Mar 13, 2009

I have a current credit score of 700 but my debt to income ratio is high, do you recommend to pay down my debt before purchasing a home. Do you recommend to save a 20% percent downpayment? Are their any programs stll available for downpayment assistance.

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Just a supplemental, I did not mention the USDA loan because they are more strict on the DTI ( debt to income ratio) which seems to be your problem, and they take longer. FHA would be the way to potentially go.
Web Reference: http://www.robpurifoy.info
1 vote Thank Flag Link Fri Mar 13, 2009
Your first question of criteria is, yes, they have gotten much stricter. Since early last year they have crept up, scores required, exceptions, income calculations and so on have all gotten harder. Today you just can't get a decent loan with a score under 620. 680 is the threshold for the best rates. Your score sounds adequate to get a nice rate, but it does depend on the loan-to-value ratio, in other words your down payment.

Your best rates are for loans that do not exceed 80% of value. But, you can still get 95% financing at decent rates with a 700 credit score. Or, you can go FHA 96.5%, and outside of Dallas in Rockwall you can get a USDA 100% loan.

Yes, in addition to the Federal tax credit available there are down payment assistance and other grant or subsidy programs available. Just ask your loan officer.

A high debt-to-income ratio (DTI) is not easily cured, but your debts have to be examined for timing of payoff. If you have a large car payment with a couple of years yet to run, paying it off may be your best bet. Ask your loan officer what the alternatives are.

Paying off debts can help you, but it does reduce your cash. You might want to use that cash for items for the house or improvements to the new house.

You may contact me through my profile for more information.
Web Reference: http://www.Mortgages-TX.com
1 vote Thank Flag Link Fri Mar 13, 2009
Lucy: In my last post I meant to write that I can refer you 2 independent mortgage loan officers. They both office here in the Rockwall area. This way you will have a choice.

I am an independent Real Estate Broker with an office in Rockwall. My husband is a Real Estate attorney/realtor officing with me.

Lucy, in most cases I can represent you in your home search. Most agents in a large office will not always be able to do so. Ask me why it is so important.

I invite you to stop by so we can discuss your situation. I am just off of I-30 and Ridge Road.
0 votes Thank Flag Link Sat Mar 14, 2009
HI POTENTIAL BUYER! IN TODAYS MARKET, CREDIT CRITERIA IS JUST AS IMPORTANT AS YOUR INCOME AND ANY DEBT YOU MAY HAVE. IT IS MAKING IT HARDER FOR YOU TO OBTAIN A MORTGAGE LOAN DUE TO ALL REQUIREMENTS NEEDED. EVERY LOAN OFFICER IS LOOKING FOR THAT CLOSE TO PERFECT SCORE AND SECURE INCOME. BEING THAT YOUR DEBT TO INCOME RATIO IS HIGH ,I HIGHLY RECOMMEND THAT YOU PAY DOWN LOTS OF YOUR DEBT BEFORE GETTING INTO A MORTGAGE. NEVER GET INTO A SITUATION THAT YOU WILL BE SORRY LATER BECAUSE YOU ARE STRUGGLING TO MAKE ENDS MEET . CONTACT ANY WEICHERT GOLD SERVICE MANAGER NEAR YOUR AREA FOR ALL YOUR MORTGAGE NEEDS.
0 votes Thank Flag Link Fri Mar 13, 2009
I am not sure what the 14% is referring to, but an 80% loan typically is paying 1/2% less than a 95% loan in our office, and neither of them is over 6.
Web Reference: http://www.Mortgages-TX.com
0 votes Thank Flag Link Fri Mar 13, 2009
Svave 20% or more. That is the only reason to buy. You can do it at 14% if you have no agents involved.
0 votes Thank Flag Link Fri Mar 13, 2009
With that score, your DTI can be over guidlines, it's called a compensating factor and it does and can happen. I'd suggest letting a lender take a look at it.. Check my website and give me a shout if you like, my wife is a loan officer and we work as a team.
Web Reference: http://www.robpurifoy.info
0 votes Thank Flag Link Fri Mar 13, 2009
Lucy: The credit market changes daily. I would leave it to a profession loan officer to answer your questions. If you like, I can refer you to them to you.

If you are a 1st time home buyer, there is a tax credit of up to $8000. You will not get that money now, however, when you file your 2009 income taxes you may claim it then. You could use that money to help pay down your debt. Just a thought.

Regardless, Lucy, interest rates are at historic lows, and the prices in Rockwall County are the best they have been in years. If you have a secure job, I would think this is the time to buy.

I am a real estate broker in Rockwall just off of I-30 and Ridge Road. I'd be glad to help you further! You may reach me at 972 771-6677.
0 votes Thank Flag Link Fri Mar 13, 2009
You should visit with a loan officer and apply.
With all of that data, they can tell you what the best course of action is... As we have the ability to simulate some things in the loan software.
0 votes Thank Flag Link Fri Mar 13, 2009
Lucy,

The credit criteria is definitely getting stricter on loaning money. Your best bet is to obtain the help of a mortgage professional to guide you in the right direction.

Good luck!

Jackie - truvaluerealty@gmail.com
0 votes Thank Flag Link Fri Mar 13, 2009
I would say you would definitely need to contact a mortgage professional to get your best course of action. There aree usda loans that are 0 down, but have to be in "rural" areas. Also the dti on this is a little stricter. If you would like a recommendation I have a couple officers I work with that could guide you the right way. Also if you do not have an agent I am based in Forney but have done transactions in Rockwall and am very familiar with the area. Also I rebate all my buyers 20% of my commission at closing.

Please do not hesitate to call
RJ
214-682-0598
Web Reference: http://www.findapadfast.com
0 votes Thank Flag Link Fri Mar 13, 2009
Lucy,

Your question is a good one and well timed.

Lenders are indeed subscribing to new and more stringent guidelines for making loans. There is however, money available for borrowers. The days of stated income and zero deposit are long gone. Banks are looking a employment history, established good credit, money for a significant deposit, savings etc when considering makin loans to people.

Our recommendation is to consider an FHA loan where the deposit is currently at 3.5 percent of the sale price.

Good luck
0 votes Thank Flag Link Fri Mar 13, 2009
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