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Home Buying in 19149 : Real Estate Advice

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Activity 11
Sat Sep 7, 2013
answered:
There are 4 basic things that a borrower needs to show a lender in order to get approved for a mortgage. Each category has so many what ifs and sub plots that each box can read as itâ™s own novel. In other words, each category has so many variables that can affect what it takes to get approved, but without further adieu here are the four categories in no particular order as each without any of these items, you’re pretty much dead in the water:

Income

You need income. You need to be able to afford the home. Without it, forget it! But what is acceptable income? Basically, it all depends on the type of loan that a borrower applies for. Jumbo, V.A., USDA, FHA, Conventional, Kentucky Housing KHC Super Jumbo? Let’s just say that there are two ratios:

First Ratio – The first ratio, top ratio or housing ratio. Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment. The housing payment consists of Principle, Interest, Taxes and Insurance. Whether you escrow or not every one of these items are factored into your ratio. There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.

Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has. So, it includes housing payment as well as every other debt that a borrower may have. This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on. Again, if you’re paying less than 43% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe. You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.

What qualifies as income? Basically, it’s income that has at least a proven, two year history of being received and pretty high assurances that the income is likely to continue for at least three years. What’s not acceptable?????? Cash income, short term income and income that’s not likely to continue.

Assets

For the most part this is fairly simple. Do you have enough assets to put the money forth to qualify for the downpayment that the particular program asks for. USDA says that there can be no money down. FHA, for now, has a 3.5% downpayment. Some loans require 20% down. These assets need to be validated through bank accounts and sometimes gifts. Can you borrower the down payment? Sometimes. Generally if you’re borrowing a secured loan against a secured asset you can use that. But rarely can cash be used as an asset. TALK TO YOUR LOAN OFFICER FIRST when discussing what’s acceptable?

Credit

Whewwwwwwwwwwwwwwwwwwwwwwwwwwww. This can be the bane to every borrower, every loan officer and every lender……and yes, to every realtor. How many times has a borrower said my credit’s good, only to find out that it’s not nearly as good as a borrower thinks or nearly as good as the borrower needs. Big stuff for sure. 640 is the bottom score (again with few exceptions) that lenders will permit. Below a 620, then you’re in a world of hurt. Even at 640, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan. 700 is when you really start to get in the “as a lender we love you” credit score. 720 is even better. Watch your credit!!!!! Check out my post:

Kentucky Housing VA FHA KHC USDA and FNMA all require 640 credit score!

Appraisal

In many ways this is the easiest box. Why????? Generally, there’s nothing you can do to affect this. Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?” If not, then not good things start to happen. Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing. The big issue comes in refinancing. In purchase transactions, the value is determined as the

Lower of the value or the contract price!!!

That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000. Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000. Big issues….Talk to your loan officer.
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Thu Jul 4, 2013
Dawn Ferguson asked:
Mon May 20, 2013
Dirk Parker answered:
First congrats on trying to make the transition from renter to owner. As the previous response stated, most sellers do not list as "rent to own" because there are too many variables to ask them to "lock their property in" to a person who may or may not buyer and who have NO history at all with them. If you must rent, then usually an owner or landlord woukd be more than happy to discuss a llease-purchase aftet about 6 month current rental payments.i assume you are saying lease-purchase because you are unsure about you current ability to buy. Please visit my blog and look through a few of the posts specifically "buying vs renting" , "1st time home buyers", and a few others to get greater insight on what to expect and how to best navigate this process. www.dirktherealtor.com. Please feel free to email any questions left unanswered.

Dirk

Prudential Fox and Roach- Jenkintown
www.dirktherealtor.com (blog)
www.dirk.parker.prufoxroach. com (web)
215-908-9390 (cell)
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Thu Sep 27, 2012
Scott Miller answered:
Hi Nate.

Personally, I like LexingtonLaw.com. I have lots of people that used them and were happy. They are professional and reasonably priced.

GOOD LUCK!

Scott Miller
0 votes 4 answers Share Flag
Wed May 16, 2012
answered:
Hello Nichole,

I never noticed that mine did and I have bought a bunch. I do know that missing a mortgage payment will drop your score by about 100 points. If you make on time payments I cannot think of any reason why that question would come into play.

Regards,
Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010
NMLS ID 143960
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0 votes 4 answers Share Flag
Thu May 20, 2010
answered:
Hello Jie,

you can pout down as little as 3.5% and have the seller finance the closing costs.
On a $50,000 purchaseyour expected down payment will be $1750.
On a $130,000 purchase your expected down payment will be $4550.

However, in June the FHA is going to be limiting the seller assist towards closing costs which may mean that you may have to contribute towards some of those costs.
Call me and I'll get you pre-approved.

Best Regards,
Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
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0 votes 11 answers Share Flag
Fri Apr 30, 2010
Kent Gagon answered:
Sun Mar 14, 2010
answered:
Jie, What Mike said below is the minimum required down payment and overall I'd recommend putting down the minimum. However, a conventional loan requires only 5% down not 10%. I9;d recommend speaking to a loan officer in order for him/her to analyze your credit/income/assets/ etc and together you can find the best program for you. If you don't have a loan officer I'd appreciate the opportunity to earn your business.
cbahnsen@mortgagenetwork.com PH: 610 -622-2212.
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1 vote 5 answers Share Flag
Fri Apr 18, 2008
Thresa Fortune answered:
I can provide you with the information, based on i reside in the mayfair section in the 19149.Beleive it or not I actually live on the exact side your talking about. Majority of the corner properties are going anywhere between 155's-165's, depending on what type of corner property it is bases on a Duplex,Row, or row w/side yard,deck or not.If you have a realtor it would be alot easier. If not feel free to email me and I will be more than happy to offer my services ... more
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