What do you think our chances are?

[Erika]

Info:

Scores: hovering just below 600

House Price: $258,900

Income: $100,000

Monthly debt: $190 student loand and $150 in revolving debt payments

Cash at closing: 3-5%

Thanks.

Erika

[wert]

Your interest rate is going to be high because of your scores. You really need your middle score above 620 to get the best rates.

If you could take some time and work on your credit you'd be better off. With low scores, you might have to lock in a pre payment penalty besides the high rate.

[Erika]

Could you give me a round about number for what a 'high' rate would be?

We're kind of in a pickle, needing to get into a home. My husband's middle score is right around 600 today, we'd be closing in January of '05 so I'd have about 7 months to work on both of our scores before closing.

But here's the rub -- we need to give the builder 2% to start building or lose our lot reservation. The 2% is, of course, non-refundable.

Thanks for your feedback.

[Erika]

Would we be eligible for first time home buyers programs? I have owned a home before, but my husband has not.

Thanks.

[wert]

It really depends what's on your credit report, but I would think that you so close you should be able to get to a decent score in 6 months. Start now and hit it hard!!!

The difference could be 2-3 points!

[Erika]

Wert,

Thank you for your reply. You've given me hope. I'm going to make an appointment with the builder's preferred lender and see what they have to say for someone in our situation. It can't hurt to try.

Erika

[firstsource]

With 5% down, you qualify for a lot of lenders loan programs. I would suggest that you start with a 2/28 ARM, ie, it is a fixed rate for 2 years, then can adjust as the index the loan is "pegged at" changes.

Charles

[Erika]

We saw a broker and she said there was no problem. Except for one false IIB reporting on husband's report, we were approved, so "go start picking out carpet." She was so laid back and confident on Tuesday that it almost scared me.

She ran our numbers and just asked us about that IIB on our report, which we got taken off of our report yesterday (yay planetfeedback.com).

She had us sign a bunch of paperwork, including the application, a GFE, Truth in lending disclosure, Preferred partner borrower disclosure, Fee authorization form (appraisal), and a Loan Origination rate lock agreement, with a float acknowledgement.

This means we're really, really approved, right?

Why am I thinking this is too good to be true? We did this on Tuesday and she was out of the office the rest of the week, so we haven't talked to her since. I keep thinking maybe she thought our socres were 100 points higher? Regardless, we have 6 months 'til closing to raise them anyway.

Second question. I read in another post that it would take scores of 600+ to get an 80/20 loan. That's our goal in the next 6 months so we can use the $15K downpayment for new furnishings and rid ourselves of PMI. My question is, can they re-run our credit and go for a different type of loan close to closing? Or are we locked into a conventional with 5% down now?

8)

Thank you!

[firstsource]

Yes, they will run your credit closer to the actually closing, most lenders done want them older than 30 days old, and most won't accept if over 45 days old the day of funding the loan.

In 6 months you should be able to qualify for an 80/20 loan.

Charles

BTW: CONGRATULATIONS