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mmolavi · Joined: 19 Feb 2008 Posts: 2 2.24 Dollars($)

Hi everyone,

My good friend and I are looking to purchase a home together ( I already own one on my own) and based on the following info I'd like to know if we would be able to qualify for a loan:

My info:
Yearly Income: $72k
Fico: ~700 (No bankruptcies, judgements,) I have one collection for a cable bill of $94 that I have paid off but it is only showing paid on two of the three bureaus ( I have proof of payment)
Current Mortgage: Condo, $243k remaining on the FHA loan at 4.5% 30yr fixed (would like to keep and rent out)
I'm also a veteran and can qualify for a VA loan.

Her Info:
Yearly Income: $80k
Fico: 750+ Perfect credit
First time home buyer

Prospective home info:
Home price: $375k
Down payment: 10% ($38k)
Primary residence for both of us
Both of us will be on the loan and title
Would like to stay in the home for around 5 years

Based on the above info which loan do you thing would be good for us. Additionally, I'm a little worried that my FICO score of ~700 is a little low.

Any thoughts/advice would be greatly appreciated.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Mmolavi,

Welcome to the forum.

Thanks for the detailed information. I think based on the above information, you should not have problem to get approved for a mortgage. 700 fico score is not too bad.

Have you already consulted with any lender? If not then shop a bit for lenders. You should get affordable rates and terms.

Feel free to ask if you have any further questions.

Thanks,
Larry

mmolavi · Joined: 19 Feb 2008 Posts: 2 2.24 Dollars($)

We haven't consulted with a lender yet.

When you say we should be able to get affordable rates and terms would that be around 5.75%?

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Mmolavi,

Welcome back.

Yes. May be. But it depends upon negotiations. As you have said "Would like to stay in the home for around 5 years " I think you will like to go for ARM. Is not it?

Even in this community there are thousands of lenders. You can try to contact them at http://www.mortgagefit.com/unitedstates/

Hope that will help you

Feel free to ask if you have any further questions.

Thanks,
Larry

dcrum0 · Joined: 18 Feb 2008 Posts: 19 10.23 Dollars($)

For some reason I'm just not a big fan of ARM loans. I would really think about the situation before I decided to do the ARM loan, why?

1. There is usually less than 1% difference between a 30 year fixed and a 5 year ARM. Right now on bankrate the averages are .8 percent difference and with your numbers would save you ~$160 per month.
2. What if interest rates sky rocket in the next 5 years and rates are too much for you to move and you decide to stay in the home.
3. You like the home so much you don't want to move and have to refinance the home anyway at a higher rate.

I know both of you are very responsible with your finances, but you just never know what the future holds. Guess I'm a little conservative when it comes to finances. Good luck with your decision.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Hi mmolavi,

You should qualify for the best rates available. A 700 score is plenty good and don't let any one tell you that it is not good enough. Rates do change daily based on market conditions. Unfortunately the rates have been going up over the last couple weeks and even over the last couple days. You will want to look at locking in a rate as soon as possible. A rate lock will hold the rate as of the day you lock so if rates do go up further you are protected.

You even qualify to buy out PMI insurance to reduce your payments since you have less than 20% down.

gmakerley · Posted: Thu Feb 21, 2008 10:41 am Post subject:

i wish i had more 700 scores walking in my door!

your credit is terrific - i would suggest you take steps to eliminate that collection that was paid right away. simply forward your proof to the two credit agencies still reporting it.

maybe an arm makes sense if you plan to be in the home for only a short while; otherwise, fixed rates are sufficiently good that you would be well-advised to opt for one.

you should have no trouble qualifying.

livinginnky · Posted: Thu Feb 21, 2008 10:54 am Post subject:

Hello and welcome to the forums.

You appear to qualify for the best fixed rates. As stated above not all ARM loans are bad. You just need to read everything and understand it (or ask us!)

What matters now is...
Job history
Assets
Credit history length

But from what you have provided.... you should do just fine.

Where do you live by the way?

charlesarmbruster · Posted: Mon Feb 25, 2008 12:41 am Post subject:

I agree with most all comments to-date. I would certainly advise a 30-year LPMI product which can had for about 6%. The client intends to rent his current home -- he is going into a legal relationship with his friend by contracting a purchase and a mortgage. They have plenty of income and good credit.

They are........what we need more of in this wonderful country of ours! Credit-worthy homebuyers starting a financial future which includes their first rental property. Next, they'll decide to start a business of their own!

charlesarmbruster · Posted: Mon Feb 25, 2008 12:43 am Post subject:

I agree with most all comments to-date. I would certainly advise a 30-year LPMI product which can had for about 6%. The client intends to rent his current home -- he is going into a legal relationship with his friend by contracting a purchase and a mortgage. They have plenty of income and good credit.

They are........what we need more of in this wonderful country of ours! Credit-worthy homebuyers starting a financial future which includes their first rental property. Next, they'll decide to start a business of their own!

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