Ready to buy again

[sqa4life]

Hello from new member

We had a short sale closed in March 2010 with hardship reasons. We're now ready to buy again with 20% down payment, but we'll have to borrow some from our 401k. My mid FICO score is 676 and it should be over 780 after the next credit card statements are updated to all 3 credit agencies.

What kind of interest rate is reasonable in this market?
what should I ask the loan officer/broker when obtaining a loan?
Should we buy now or wait until the end of the year? I heard the interest rate will increase after the summer.

Any advice will be greatly appreciated.

Thx

[1stStep]

You're going to have some challenges...the short sale less than 2 years ago will be 1 of them...it will be safe to assume that your loan will be looked over with a fine toothed comb. Underwriting standards have been tightened significantly in the last couple of years...

Also, you do not mention any savings...you'd be in a better position of you had at least 3 months of expenses saved as well - 6 months would be even better.

[2ndTimeAround]

Originally Posted by 1stStep

You're going to have some challenges......

Well said 1stStep...


sqa4life - in the short term future it will be very hard to get any-type of financing going through conventional banks. All banks are different, your going to have to shop around. Be advised - Be Careful of Sub-prime Leaders.

Three things are looked at when purchasing a home. Your Credit, the LTV, and DTI ratios. You can apply for a FHA loan 3 years after a short sale. On conventional loans - the waiting period is 2ys, but you have to put 20% towards the down payment. 4 yrs for 10% towards the down payment. I heard it may be shorter if you put more down. In either case your credit score will determine the interest rate / how much you end up paying.

Another suggestion when you start shopping for loans. The first loan officer that runs your credit, it is your right to have him forward you a copy. black out your social security number to prevent your credit report from being ran too many times. More than three hard pulls in one week can drop your score 10 to 20 points...



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