Rnangiey, Renter in Omaha, NE

Mortgage approval, part time income, and credit score questions.

Asked by Rnangiey, Omaha, NE Sun Oct 27, 2013

Questions about mortgage qualification and bank recommendations?
Nurse Angie asked 1 sec ago - 4 days left to answer
Hi Everyone,
My husband and I are wanting to build a home, so I have a couple of questions about qualifying for a mortgage.
1. Is it an absolute necessity to have worked a part time job for 2 years before the income will be counted for a conventional loan? By the time we go to get pre-qualification for build I will have worked my part time job for about 1.5 years.

2. My credit score is roughly 680-690. My husbands is somewhat lower, about 650. Are there banks that offer conventional mortgage financing (not FHA) with a credit score less than 660?

3. I have a foreclosure that is 6 years ago this March. I have a divorce decree that orders my ex-husband to refinance the home into only his name and that I am not responsible for the payment, but he let it foreclose before he ever re-financed it. Have to wait 7 years for conventional mortgage approval?
Thanks!

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Roberto Soar…, Home Buyer, Pembroke Pines, FL
Mon Oct 28, 2013
Will pay cash in advance.
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Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Mon Oct 28, 2013
Hi Angie

1)
With regards to part-time income, if it is not your primary source of income then you would need a full 2 year history to count it. If it IS your primary source of income, then it really depends on the stability of this income as well as having other positive factors that offset the shorter income history. For example, if you work 15 hours one week, 20 the next, no rhyme or reason then it's probably going to be difficult to count it. If you fairly regularly work 25 hours per week and you have strong reserves or a low debt to income ratio, then it should be easier to count that income.

2) Yes you can get conventional financing with as low as a 620 credit score. however, once you get under 660 the interest rate is going to be a lot higher than FHA and the monthly PMI will be virtually identical to FHA, IF you can even get it. Some PMI companies are going to give you a tough time with a credit score that low.

3) Conventional requires a 7 year waiting period after a foreclosure. The mortgage takes precedence over the divorce disclosure so you're probably stuck there.

My recommendation would be to go FHA for now so you can get into the home. The rate is going to be great - even with a lower credit score - and the PMI will be pretty close to what conventional is. Then work on raising your credit scores and if the opportunity presents itself to refinance into conventional at a later time then take it.

If I can be of assistance in getting you preapproved please let me know. I have worked with hundreds of couples building homes so I am very familiar with the process.

Tony


Tony Grech | Mortgage Loan Originator | NMLS #977416
PMAC Lending Services, Inc.
Toll-free (855) 642-4762 ext. 278
Mobile (313) 622-7383
Fax (248) 945-4842

tony.grech@pmac.com
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