Buying a house with Fair credit.?
by Author on Monday, August 2nd, 2010 | 7 Comments
My husband and I are trying to buy a house. His scores are in the 670 - 690 range and mine are 600 - 660. What is the best way to go about getting a loan and getting a good interest rate? What type of financing should we consider?
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The banks will offer you the best interest with lower closing cost. If you can’t receive financing from the bank you must go through a Mortgage Company, which will result in higher financing cost compared to a bank. The best thing to do is figure out how much you afford each month and then go to a bank get yourself a pre-approval.
Mortgage lenders will qualify your loan based on the primary borrower’s credit score. The primary borrower is whoever makes more income. If your husband is the primary wage-earner, then you don’t have much to worry about–with 670-690 credit he should qualify for A-paper rates. The best way to get a good interest rate is to shop around–call me and a few other lenders (banks, mortgage companies, etc.) and see who is lowest. As for what type of financing, that is entirely dependent on your goals. How long will you be in the house? Do you expect your family size to increase or decrease within the next few years? Will your income increase or decrease within the next few years? A good mortgage loan officer will be able to give you advice and options. Good luck.
Rick Lanicek
http://www.primelendingonline.com
PS: Banks don’t necessarily have lower closing costs and/or interest rates than mortgage companies. Some mortgage companies are owned by banks (like mine). Shop around.
Well first things first how much would you like to put down. That will give us a good look as to what type financial plan your willing to go. If your looking for a loan whats the loan amount and what is your monthly income and what are your monthly spendings. Then you leaver the rest up to me. I can help with the rest thats my job. I will custom tailer your loan for your benificial needs.
Your credit is better than fair – you could get 100 Percent financing, and have the seller come in with closing cost assistance, and have Zero down. (except for paying for the appraisal) This is always the buyers up-front expense.
Talk with a broker, a broker underwrites for many company’s (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.
Try to find someone (broker) that will pull your credit one time, and submit your loan application to company’s that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only – not the final – but it does help you figure things out.
When you Decide to buy, decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now – (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 – This is just a estimate – ok –
It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help – especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far??
Decide if you want a fixed rate. There are also, interest only loans – adjustable loans, option arms (where you pick the payment, from 4 payments, including interest only). Interest only are lower payments, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount.
As I mentioned to you, Good Luck – the Loan Process can be fun – at least I love being a Broker, getting to help my clients is rewarding to me. Find a Broker who cares and will go over the full loan process with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process.
http://www.fanniemaefoundation.org/...
http://www.fha-home-loans.com/
http://www.freddiemac.com/
If you go with a FHA loan, FHA has MI included. You could choose to go sub-prime – for borrowers that have a lower score, and get a 1 loan, with NO MI. But the rate would be roughly .35-.75 higher. (MI is mortgage insurance in case you default on the loan, it is a way for lenders to have added insurance. It is places ont he mortgage, if you borrow over the 80 percent of the home value. It is not the same as Home Owners insurance, ok)
Conforming A+ borrower’s loans have MI included, but the rates are better starting in the mid to high 6′s (with rates going up.) The more money you borrow – the higher the rate normally. I used the 7 percent for a 1 loan, that is a estimate only.
With a government loan – collections and judgements will have to be paid (most ppl do not know that) but for FHA it is true….
Again, good Luck to you both, and if I can help in any way check out my web site, for links to all the credit reporting agency’s and other useful information. This is not an advertisement – just helpful information for you.
I am a real estate agent I can help you to negotiate for you and the best part is that you dint pay for it sellers pay…
When purchasing a home there are so many factors that go into finding the right program that you will need to provide more information. It wil depend on if you are looking to put money down or not, what the debt to income ratio will be, how much disposable income you have, if it will be a full documentation loan or a stated product. I may be able to help you depending on where the property is located or get you intouch with someone that can help. You can contact me via email cbrown@structuredmortgageltd.com or at my office (614) 985-3771
Thank you,
Curt
FIRST I NEED TO KNOW WHERE YOUR LOOKING TO BUY.2ND CALL ME 9093909170 I OFFER A FREE PROPOSAL I WOULD NOT NEED TO PULL CREDIT YOU CAN FAX IT TO ME I CAN HAVE SOMETHING FOR YOU I A DAY