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Would it be possible to get a mortgage with these circumstances????


cheyenne52883
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I like to daydream and look for houses knowing that I am not prepared to buy. Today, this may have gotten me in trouble.

 

There is an ADORABLE house for a mere $45,000. We can get together a downpayment of about 5% but did not intend on buying soon so that is about all we can come up with. I have decent credit (652 according to Credit Karma - I know it's not accurate) with NO negatives. My husband is 623 (also from Credit Karma) with several OLD (all past SOL) negatives. We make decent money ($81k according to W2 last year) and have a new 401k with about $2,700 in it.

 

Do you think it is even worth trying to qualify for a loan? If so, should we try a FHA or a traditional?

 

 

 

 

 

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Cheyenne, I am an ex-mortgage broker.  Did it for 10 years.  Most lenders today require a minimum 640 middle credit score for FHA approval - for both applicants.  If you need both you & your husband's income to qualify, then the lender will look at the 3 credit scores for both of you.  The lender will use the lower "middle" score for both of you to see if you qualify.  For example, assume your scores from Equifax, Trans Union and Experian are 652, 660, and 624 .....  and your husband has a 623, 635, and a 680.  In such a case, you will not qualify for a joint mortgage because your husband's middle score is 635.  If you could afford the mortgage loan using just your income and left your husband off the loan, then your scores alone would make the cut since your middle score is 652.  FYI, your score must remain at the minimum threshold throughout the loan application process.  The lender will pull your credit again a few days before closing.  If your score drops to below what's required, you will lose your approval.

 

Also, if your husband has negative debts that are still unpaid, he may not qualify for an FHA loan w/o paying those debts.  The mortgage business is MOST unlike what it was back in 2008 and earlier.  All lenders are strict and do meticulous underwriting to avoid problems of the past.

 

FHA requires a minimum 3.5% down payment.  It would be impossible for you to qualify for any other type loan - unless your state is offering some special programs for buyers.  Conventional mortgages require a 20% down payment.  And don't forget the closing costs.

 

I strongly encourage you to seek out a mortgage broker to help you.  It's free.  He/she will tell you what you need to do.  The mortgage business is CONSTANTLY changing due to the crazy financial markets.   It's complicated and no-nonsense.  The rules today can change tomorrow - NO EXAGGERATION.  And FHA is always changing.  I have seen many buyers lose out on an approval (at least for a while) because they contacted a loan officer too late and end up making critical missteps. 

 

When you ask, "...should we try a FHA or a traditional?" ...  that's a question for a trained, active, licensed mortgage broker.  There are FAR too many factors that go into the question of qualifying.  And though as I said you do not qualify for a 20% down traditional mortgage, there also might be reasons why you wouldn't qualify for an FHA loan.  Only a complete loan application would answer that question.

 

Please contact a professional.  If I were you, I would avoid calling any of the big lenders like Bank of America or Wells.  They are too big and impersonal and will not give you the best service.   In fact, they will often steer you wrong or have employees who are not up to date with FHA.

 

Good luck.

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