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Would I qualify? First Time Buyer


Kidsmoke
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Just wondering if I'd qualify for a home loan. I'd be looking at something around 180K or lower in price. Here are the negatives on my reports.

- 1 Paid Judgement of $600, judgement satisfied 6/00

- 2 Student loans through SW Student Loans (4/03, 7/03 60 day lates)

- 5 Student loans through Sallie Mae (each loan has 4 90 day lates, last one was 4/03 and 1 120 day late from 11/01)

- 1 paid collection account as of 6/01, notes on credit reports list as wage garnishment.

- 1 paid collection account as of 4/00.

Positives

Car Loan only shows up on EQ. Opened 3/2 $8,798. Pays as agrees, no lates. Balance about 2K. (I got raped on interest rate on this one).

Capital One CC opened 7/2 $300 limit, pays as agrees, no lates. High Credit lists as $399. $0 Balance

Orchard Bank CC opened 2/05. Limit $700. Balance $74.00

Current balances/payments.

Car 2K, $315 per month

SL - 8K, $125 per month

SL - 12K, $120 per month

Currently earn 73K a year, employeed for 7 years at same company.

10K in 401K and currently contributing 6%.

I've been paying 1,050.00 in rent for the past 4 years and am thinking about having this added to my CR via rentreporters. Or getting a letter from my landlord (who just happens to be the CEO of a bank).

I don't have much in savings to put down, however I could sell some stock and probably pull out 4K or so.

So what are my chances and what kind of rates would I be paying?

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Just wondering if I'd qualify for a home loan. I'd be looking at something around 180K or lower in price. Here are the negatives on my reports.

- 1 Paid Judgement of $600, judgement satisfied 6/00

- 2 Student loans through SW Student Loans (4/03, 7/03 60 day lates)

- 5 Student loans through Sallie Mae (each loan has 4 90 day lates, last one was 4/03 and 1 120 day late from 11/01)

- 1 paid collection account as of 6/01, notes on credit reports list as wage garnishment.

- 1 paid collection account as of 4/00.

Positives

Car Loan only shows up on EQ. Opened 3/2 $8,798. Pays as agrees, no lates. Balance about 2K. (I got raped on interest rate on this one).

Capital One CC opened 7/2 $300 limit, pays as agrees, no lates. High Credit lists as $399. $0 Balance

Orchard Bank CC opened 2/05. Limit $700. Balance $74.00

Current balances/payments.

Car 2K, $315 per month

SL - 8K, $125 per month

SL - 12K, $120 per month

Currently earn 73K a year, employeed for 7 years at same company.

10K in 401K and currently contributing 6%.

I've been paying 1,050.00 in rent for the past 4 years and am thinking about having this added to my CR via rentreporters. Or getting a letter from my landlord (who just happens to be the CEO of a bank).

I don't have much in savings to put down, however I could sell some stock and probably pull out 4K or so.

So what are my chances and what kind of rates would I be paying?

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You should not have any problems in getting a loan for 100% of the sales price/appraised value of your new home.

I would suggest that you try to get the seller to discount the sales price of the home ot you, in the form of a "seller paid concession" where the seller is paying the closing costs. Some lenders will allow up to 6% of closing costs to be paid this way; some just the costs associated with the transfer/sale, but more and more are allowing the seller to also pay the 1 year Home Owners Insurance and if there are pre-paid interest costs, allowing those also, as long as the total is within their guidelines.

Charles

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I don't know what is going on there, it is upsetting to me, as I have referred myfico.com for a long time, as an accurate barometer of reality.

I have had several others that have had either major up or major down when I ran their credit.

Now, the news you have is good to a degree. You probably will be able to get a loan for 100% of sales price/appraisal value, but the rate you pay at a 580+ score vs a a 600 or 620 score. And normally, you should be able to boost your scores to the 640-660 range and get into a new loan in 2 years or so.

Charles

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Spoke with the mortgage guy today and he sent me the credit report. It looks like myfico was actually correct. My EX scores were the exact same on the report he pulled and the report I pulled from myfico. TU and EQ were way off due to 2 student loans showing as 61-90 days late with past due balances. Contacted both CRA's and disputed. The accounts are actually current with no past due so hopefully that will come off shortly and those two scores will bump back up a bit. One question I do have is how lenders use scores. The report he pulled shows TU 585, EQ 590, EX 646. During our conversations he kept saying my score is 585, so do lenders use your lowest score? Also he said I could still get into a home, but he'd have to go through FHA with the 585 score and that would mean I'd need at least 3% down. I'm going to look at a place tomorrow and I'll probably wait and see what happens with my scores over the next few weeks.

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I am so glad to hear that myfico is back to being accurate, at least 95% of the time.

So far, I have not heard of a lender that only used the lowest score. There are some lenders that only use one of the 3 bureaus, but not many.

With FHA, they allow buyer assisst programs, where the seller gives up to a 3% sales concession in the form of paying your down payment.

If he can get you to qualify for an FHA, then you will be able to qualify for a sub-prime loan. Then it can be 100% LTV (total sales price/appraised value, whichever is lower.

Another advantge to sub-prime is that with FHA the most their programs will allow is the seller to pay 3% of the Non-recurring closing costs; Subprime will allow up to 6%, and some will allow that 6% to go towards all closing costs, including HO insurance and pre-paid interest.

Hope that helps.

Charles

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