Jump to content

SOmeone else needing Charles help...........


efish
 Share

Recommended Posts

Charles,

My husband and I are both Active Duty Air Force and currently own a home. I went through a bad divorce about 5 and a half years ago and because of it my credit is junk for at least another year. Our current Mortgage is in my husband's name alone, but both are on the deed. We are now looking to sell in March/April because the AF is relocating us. We want to buy a new house when we get there. The problem is the credit issue with me. My husband has good credit (no major flaws), but I don't. We want to purchase a home that is about 215,000. We aren't having a problem really getting approved, but the interest rate is atrocious. Well, I shouldn't say that, but not where we want to be. Because we need both incomes to be approved for that amount we need to do a no asset, no income verification loan. We were thinking of a 80/20, 80/15/5, 5/1 ARM, something like that. We know that our tour is only 3 years, possibly four, so we know that we will be relocating again in 4 years at the latest. So we want the cheapest route possible of course on a mortgage payment. One place offered me 5.5 on a 5/1, 7.3 on a fixed. No thanks. What's the best route. We have let about 3 lenders look at his credit so I don't really want any more dings, but I would be wiling to pull the report and fax it over so we don't have any more pulls. His middle score is between 660-668 depending on which lender you ask. We are going to re-finance now and pay off a credit card that we maxed out, so once that is paid the score should go up higher. We have the home builder on line already and are ready to start building, got the approval from their Mortgage company, but would like to where we will be payment wise before we commit to a house of that caliber. Right now we are looking at 1600 a month. Can't do that….. Would love your help.

Oh yeah tax is about 100 a month and insurance about 50....

Link to comment
Share on other sites

First of all, my general advice would be to not spend the money to refinance just to pay off a credit card. Your scores are good enough for what it seems you need to do. You might want to do a HELOC (Home Equity Line Of Credit), but be careful there, as some banks/investors report as a 2nd mortgage and some as an installment type loan. If the latter, it will not help you, as you will end up with a maxed out credit line. You also might consider going to the credit card company and getting an increase in your limit as that would help, and at 0 Cost.

Secondly, if you will be buying and selling in 3-4 years, don't get a 5 year lock on your rate. Check out the net result of having a 3 year ARM-Adding the rate if it went up the max on the 4th year, as I think the blended rate will be less than a 5 year rate. And of course, don't think of paying for a fixed 30 year rate.

Third, Check carefully on the rate you were quoted. It sounds more like the rate for the 1st (80%) part of the loan, and not the blended rate for the total loan, ie averaging the rate for the 1st and 2nd. Sometimes that is a mis-understanding when the LO does not spell things out to the borrower.

Lastly, and this is just my opinion. In your situation, if you have an investment you can make that will pay the same or more than the rate on the 2nd, get an 80/20, so as little as possible comes out of your pocket, on the new home. If you are in an area where homes are going up in value, the leveraged purchase will yield you a better rate of return for sure.

Thanks for coming to the forum.

Charles

Link to comment
Share on other sites

Well, that seems to be where the problem lies. The score is only 660-668 and most lenders we have talked to want a 680 or higher to get stated, 700 being the best. Just raising the credit limit won't give us a high enough score I don't think. I would love to do a 80/20, however it seems like the interest rates are ridiculously high with stated. He has no lates, no C/O's nothing, but because of that darn CC it brought the score down. Anything First Source could do?? :lol: I did contact oen company and there interest rates were on an 80/15/5-5/1 4.84 on the first and 1.775 on the second for a total of 1078 before tax and insurance, butthey require a 700 score and the mandatory 5%. I would like to stay withose kind of interest rates, but an 80/20. Of course we don't close til May either. If you think you could do something or someone you know, let me know. Thanks for the help.

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.