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All the answers have informed and helpful points but none seem to solve your problem. If your lease runs out in March, you don't have much time or alternatives. FHA is always a good choice but entails a lot of red tape and time to establish.
May I suggest a little less conventional way for you to acquire your new home. I would contact a Private Lender. Yes, they require a larger down payment. Yes their interest rates are higher than Conventional Financing. But they concentrate on Income, ability to pay back the loan and the Appraised Value of the home. There is much fewer hoops to go through and they will close quicker than most Conventional Mortgage Lenders.
There are many Private Lenders out there looking for places to put their money. One that I have worked with and had considerable success is The Westmoore Group. They are licensed in the State of Georgia for Home Mortgages as well as Hard Money Loans. They will lend up to 12 years which would give you adequate time to get your Credit Scores in order and you will be building equity in your property in the mean time. As some Private Lenders do, they do not have a pre-payment penalty clause in any of their contracts so paying them off as soon as you qualify for Conventional Financing well not cost you.
Their contact information is:
The Westmoore Group, LLC
Ph: (646) 801-6190
Fx: (646) 619-4291
The Westmoore Group, LLC is a licensed lender in the State of Georgia and operates under the license #30544.
It's worth a call to see if they can help you and get their advice.
Best of Luck and feel free to contact me if I can be of any further help.
Cut and paste the link above Raegan. USDA are the beef people..lol. Actually it's a department of the government that offers financing in rural areas. The loan is 100% financing with no mortgage insurance. The rate is slightly higher. You have to live in the area of the USDA map from the link. Income is restrictive for either a single person or married couples. Pretty neat product if you're willing to live out yonder.
Jaquillia, thanks for the info on VA. I was referring to FHA, since no mention was made about them being a Veteran. Good to know though as I am a Veteran. Here's what else I found on VA loans with scores to 530: http://www.fha-world.com/va-loan.html
According to the FHA, money from raises, annual bonuses, and cost-of-living style pay increases can be used as verifiable or effective income IF they are verified in writing by the employer and are due to be paid withing 60 days of the loan closing. http://www.fhanewsblog.com/2011/07/verifiable-income-rules-f
You have to get a contract by the employer that the pay raise is a sure thing. Honestly, you won't want it any other way. It's not a good thing to buy a house you can't afford while banking on the hopes of getting the pay raise. So, get it in writing even if you're not buying a house.
Lenders that work with 530 scores require 10% down of your own funds. The 530 minimum is FHA's minimum (increased from 500 to 530 within recent months. There's a catch to this though. Most people with scores that low, have collections and usually those collections are over $1000 (otherwise the account would be paid and the score would be higher). FHA recently lowered their maximum collection balance from $5000 to $1000 (excluding medical). The other issue is lines of credit. You must have at least 2 with 12 months of on time rent. Most people with scores that low, don't have any credit or they may have brand new lines that don't meet the 1 year requirement.
Credit scores are not the only thing lenders look at: NSF on bank statements, inconsistent employment, how soon will you finish school before the student loans have to be paid back? Any breaks in employment? How much money saved? A lot of people with bad credit don't have any money and the lender is stumped as to how a person with no debt and working is unable to save money?
I can lend money for owner occupied residence using private funds to finance you, regardless of credit. Although you may qualify for no money down, the rate starts at 9.5%.
It is said by financial experts that you should buy a house using one income so that if someone becomes unemployed, the house payment can be covered somewhat. I'd recommend using your husband's income only to qualify and use your money to save for emergencies.
Credit scores, along with your overall income and debt, are big factors in determining whether youâ€™ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:
Check for and correct any errors in your credit report. Mistakes happen, and you could be paying for someone elseâ€™s poor financial management.
Pay down credit card bills. If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.
Donâ€™t charge your credit cards to the maximum limit.
Wait 12 months after credit difficulties to apply for a mortgage. Youâ€™re penalized less for problems after a year.
Donâ€™t order items for your new home on credit â€” such as appliances and furniture â€” until after the loan is approved. The amounts will add to your debt.
Donâ€™t open new credit card accounts before applying for a mortgage. Too much available credit can lower your score.
Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.
Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.
To qualify for a mortgage, your income is calculated from your actual income, not projected income. Your new hourly wage cannot be used until it has gone into effect. This is for hte very reason that you indicated, it could not be approved.
I don't know why a Loan Officer would have qualified you on income that cannot be used unless he/she was just trying to see if that would be an option for you after the raise took effect.
Rodney Mason, NMLS #151088
Sr Loan Officer
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of lending experience.
Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePathÂ® | HomePathÂ® Renovation | HomeStyleÂ® Renovation | VA | USDA | GA Dream | Jumbo Financing.
Here is my full question.. Dont know where it went.