Financing in 84043>Question Details

Jake Johnson, Home Buyer in Lehi, UT

Can I get approved for a loan for $220k If I just recently payed off all of my bad credit?

Asked by Jake Johnson, Lehi, UT Sat Sep 29, 2007

I have several payed off loans with no missed payments and have been currently paying on a 15000 dollar loan for the past 2 and a half years, with only one late payment. My monthly bills are $299.00 for my vehicle, and $144.00 for the loan I got to pay off all of my bad credit. I found the perfect house for me and my family and it would be my first house however I don't know if I would be wasting my time or if you think there would be any options for me to get a loan like that. I own my own business and average $5000 a month, and the house I'm looking at is worth well ove $300k and they are only askin $219K. You input would be greatly appriciated. Thank You _ Jake Johnson

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I would recommend that you consult with a loan agent who will be able to pull your credit and tell you what your options are. Don't be afraid to ask. If your credit needs improving, then the loan agent can give you tips on what to do to improve your credit score or refer you to a credit repair service. The sooner you make your appointment the better. Since you found the perfect house, you owe it to yourself and your family to explore your options. The worst that can happen is that you'll find what you need to do to make it work. The good news is that it does not look like the prices for homes are going to go up any time soon.
As far as the house hunting is concerned. Go in with your eyes wide open. How do you know that the house that you are interested in is worth $300,000? If they are only asking $219,000, I would think that they are either desparate to get out or there are a lot of repairs that need to be done. I would highly recommend that you get a real estate agent who only works for you.
Before you set your heart on this house, get pre-approved. There are lots of houses out there right now. Take your time and explore the market. Good luck.
Web Reference: http://www.go2kw.com
0 votes Thank Flag Link Sat Sep 29, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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Absolutely, you could probably qualify for a Fannie Mae My Community mortgage. They are famous for working with lower fico scores. You can even go to 100% financing. Just ask any loan officer about them, they should know about it.
Web Reference: http://getprequalified.com
0 votes Thank Flag Link Wed Nov 7, 2007
Hi Jake, You sound like a perfect candidate for an FHA loan. FHA is not score driven. Read a recent article about that.

http://www.3poundsofrealestate.com/2007/09/30/did-you-know-t…

If you talk to a loan officer and they tell you they have better products than FHA, ask them point blank. Are FHA approved? If the answer is no, keep looking.
0 votes Thank Flag Link Mon Oct 22, 2007
Jake,

Seems that most here are missing the boat. You are a first time home buyer. That means you are open to more programs than any other buyer. Try calling your local Bank of America. The ofices here in Fl are offering to first time home buyers only up to a purchase price of $300,000 100% financing with no PMI with interest rates in the mid to high 6's. There is no credit rating requirement they just don't want to see alot of late payments. Closing cost could be about $5,ooo but that could be in a form of seller pay down (add it to the offer) and you would only have to have $500 come out of pocket. In Fl it is the ACORN program. Check it out it may be worth it!

Best of Luck,
Linda J Sears
0 votes Thank Flag Link Mon Oct 1, 2007
Jake, your credit scores will determine what programs you are qualified for as well as the interest rate you will receive. It will take some time for the impact of the bad credit to improve in your credit scores. Seek a pre-approval before making any moves. With the right mortgage broker you can at least see if this is workable today or if you need to set a future goal.
Web Reference: http://www.slarson.com
0 votes Thank Flag Link Mon Oct 1, 2007
Hi Jake. Its sounds like you would qualify for a mortgage. Depending on your comfort level with the monthly payment would determine if you qualify for this home. Fha is the one of the best ways to go except since you are self employed you would have to show tax returns and fha qualifies off your bottom line when expenses have been deducted. Your best bet is to contact a bank and determine what the best program would be. I am a loan officer for JPMorgan cahse and work with all types of credit. If you are interested in learning more about are programs Please let me know
Thanks
0 votes Thank Flag Link Mon Oct 1, 2007
Yes Jake, you can get approved for a loan. The real question here is what will your monthly payment be and are you comfortable with that payment?

The best thing to do is to visit with your preferred lender and find out what your options truly are. I have a fantastic loan company in Utah County that I recommend to all of my clients without hesitation. If you would like their contact info, just give me a call. They will be very honest with you and tell you what your options really are.

Rob Green
Broker for Smart Choice Realty
(801) 377-SMART
0 votes Thank Flag Link Mon Oct 1, 2007
Hi Jake,

I would suggest you look into FHA before exploring high interest rate subprime.

FHA Highlights
-Not FICO score drive
-Ratio driven which means your housing payment can not more than 31% or your income and all debt can not be more than 43% of you income.
-Full doc only
-County limits (219k should be doable, however I would have to know which county you are buying in to verify)
-Seller can pay 6% towards closing costs plus 3% for downpayment
-6.5% interest rate (changes daily)

The best way to know is to complete an automated underwriting. With automated underwriting sometimes the guideline allow for compensating factors.

Subprime will loan on more liberal guidelines. Interest rates can be 1.5 to 2 times higher. Again first verify you can not qualify for FHA. It is designed for the owner/occpant home owner.

Mark
0 votes Thank Flag Link Sun Sep 30, 2007
Hi Jake:

Your first step is to find a reputable mortgage broker and find out whether your current financial situation allows you to purchase a house for $220K. The mortgage broker will be able to look at your past credit history, combined with your current income, your savings, your debts services (monthly payment of all), tax, property tax for the new home, interest payment, etc and your regular living expense and help you decide if getting a $220K house is a good idea for you. Don't forget that you also have to pay closing costs when purchasing a home.

After the mortgage broker figures that out, then you can go shopping for the house. One thing you want to make sure is you should feel comfortable with the commitment you are making financially, and don't stretch too much because It won't be worth it if you can't pay for it in the long run.

My question about this house is why is this house priced so low? Is this a Short Sale or a Bank Owned Property or does this house have hidden problems?

If you purchase bank owned property, there will be no disclosues because the bank never lives in the house, so they are not obligated to provide them. So, be careful when you proceed. You don't want to get a house with tons of problems. In additon, if it's a short sale, anticipate to spend a couple month waiting for bank response. It's not an easy task.

Sylvia
.
0 votes Thank Flag Link Sat Sep 29, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
Contact
Thank You for your input. It was very helpful, and I don't know that the house is valued at 300k, I just have seen several identical to it and they range from 300k to 350k. I just thought it was a good deal. (5 bed, 3 bath, 2,000 sq. ft.
0 votes Thank Flag Link Sat Sep 29, 2007
Jake

This is a good question for your banker or mortgage broker. They will be able to evaluate you situation and give you some good advise on how to proceeed and even if it is possible. Be sure to explore all you options before moving forward or tabling the situation. Good luck.
0 votes Thank Flag Link Sat Sep 29, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
Contact
You are not in my area but, yes, it is possible, if what you are telling is true.

Your FICO score will determie what interest rate you will get but you are a "sub-prime" borrower.

Private money night be your best bet at this point in time. It is available.
0 votes Thank Flag Link Sat Sep 29, 2007
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