Posted on: 09th Jun, 2010 10:39 pm
I'm thinking about moving from renting to buying (mostly due to a large # of cheap foreclosures in my area), but I'm a bit unsure about whether or not I even qualify for a mortgage.
Employment: Currently, I've been on my current job for a year with a long period of unemployment before that (just over a year). I was told that some lenders may bend to 1 year if schooling was involved, but I'm unsure of this (just because somebody says it's so, doesn't mean it is). I did attend school for 3 months and received a certification in order to get my job, but it was through a company run school and not an "accredited school".
Credit: The last time I checked (about 2 months ago), my credit score was a few points above 600, but I've paid down my credit cards quite heavily since then and I'm hoping to have it to at least 620 by time I apply. I do have a few blemishes on my history, but nothing drastic. A few 30 days and a couple 60 days, but nothing beyond that in recent history.
Debt/Income: I've got a decent ratio. The only payments I have are a small credit card payment(s) and an old student loan. Both together take up about 5% of my gross monthly income.
Down Payment: I'm hoping to spend as little as possible, but by time I'm ready to buy, I should have around 5% to put down.
I guess I'm just looking for a viewpoint from somebody that knows a bit about the current mortgage market. I'm hoping to find a foreclosure that can save me a bit of money on my monthly housing expenses vs. renting and the idea of actually owning my own home is of course a big draw. Am I wasting my time thinking I might find a mortgage without 2 years on the job and/or spotless credit?
Employment: Currently, I've been on my current job for a year with a long period of unemployment before that (just over a year). I was told that some lenders may bend to 1 year if schooling was involved, but I'm unsure of this (just because somebody says it's so, doesn't mean it is). I did attend school for 3 months and received a certification in order to get my job, but it was through a company run school and not an "accredited school".
Credit: The last time I checked (about 2 months ago), my credit score was a few points above 600, but I've paid down my credit cards quite heavily since then and I'm hoping to have it to at least 620 by time I apply. I do have a few blemishes on my history, but nothing drastic. A few 30 days and a couple 60 days, but nothing beyond that in recent history.
Debt/Income: I've got a decent ratio. The only payments I have are a small credit card payment(s) and an old student loan. Both together take up about 5% of my gross monthly income.
Down Payment: I'm hoping to spend as little as possible, but by time I'm ready to buy, I should have around 5% to put down.
I guess I'm just looking for a viewpoint from somebody that knows a bit about the current mortgage market. I'm hoping to find a foreclosure that can save me a bit of money on my monthly housing expenses vs. renting and the idea of actually owning my own home is of course a big draw. Am I wasting my time thinking I might find a mortgage without 2 years on the job and/or spotless credit?
Hi kawboy,
Welcome to this community :)
First of all any of your employment details does not get included into your credit report. So, you need not worry about your employment. When you will go to buy a house, the financer will check your credit report.
As for your credit, get a copy now as you have paid down your debts. However, if the score is only 620, try to improve it a bit more because when you apply for a loan, the hard pull will lower your score by some points. If you get rejected for the loan, you won't be able to apply for another. Can I know whether or not you have become current on the late accounts? Are the lates still there?
According to the current mortgage market you will have to have a good credit score, above 700 to qualify for good mortgage offers, with low interest rates. You will have to have the ability to make large down payments. However, for FHA loan, the minimum score requirement is still 620.
Thanks,
Sandra
Welcome to this community :)
First of all any of your employment details does not get included into your credit report. So, you need not worry about your employment. When you will go to buy a house, the financer will check your credit report.
As for your credit, get a copy now as you have paid down your debts. However, if the score is only 620, try to improve it a bit more because when you apply for a loan, the hard pull will lower your score by some points. If you get rejected for the loan, you won't be able to apply for another. Can I know whether or not you have become current on the late accounts? Are the lates still there?
According to the current mortgage market you will have to have a good credit score, above 700 to qualify for good mortgage offers, with low interest rates. You will have to have the ability to make large down payments. However, for FHA loan, the minimum score requirement is still 620.
Thanks,
Sandra
I do plan on doing a soft pull before I apply and plan on making sure my score is as high as possible beforehand.
As for the late payments, yes, they are all current.
My biggest concern was the time on the job. I was thinking FHA, but to my understanding, they require a minimum of 2 years of steady employment and that was my worry about being turned down. If i'm likely to be turned down, i'd rather save the points on my credit score and not do a hard pull until I know that I qualify.
As for the late payments, yes, they are all current.
My biggest concern was the time on the job. I was thinking FHA, but to my understanding, they require a minimum of 2 years of steady employment and that was my worry about being turned down. If i'm likely to be turned down, i'd rather save the points on my credit score and not do a hard pull until I know that I qualify.
You should be ok. May have to write letter of explanation why unemployed so long. Other than that, you should be fine as long as credit score over 620. Higher is bettre, but does not matter that much for FHA. It matters more with conventional loans because you would need at least a 660 or 680 or 700 score to get PMI with less tha a 20% down payment (the score varies by state and PMI company and whether mortgage is retail brokered)
You should be okay with 1yr unemployment as long as you have a good letter of explanation. If you have a salaried job then it would be even better.
FHA can be very lenient so have your loan officer help you 'word' the LOX. Word it doesnt mean to lie but sometimes if you really write a good LOX the DE underwriter will okay it. If it's short and stupid you cant submit another letter and you'll get denied
FHA can be very lenient so have your loan officer help you 'word' the LOX. Word it doesnt mean to lie but sometimes if you really write a good LOX the DE underwriter will okay it. If it's short and stupid you cant submit another letter and you'll get denied
