looking for options please.. good fico scores

jkicak · Joined: 02 Oct 2008 Posts: 2

my fiancee and i are looking to buy a single family home in in Cicero, NY in the $145k range .

i am not sure what we can get with the way the market is going these days because we don't have much to put down. i may be able to come up with $10k. our combined income is $69,800/year.

she has a $400/mo student loan and a $200/mo car payment and a fico ~730 no judgements or bad marks

i have a $343/mo car payment and $100/mo creditcard payment and a fico ~700 no judgements, just a few late payments in the past (not for rent or mortgage).

are there still options for little down and a 30/fixed for us? please help with options....

thanks in advance!
-John

m2c · Joined: 03 Aug 2005 Posts: 937

Not sure if your question was rhetorical or if you just want to receive emails. Answer is “yes” but in the public response I want to stay with broad brush stroke matters. I will email some estimates but only to the extent of showing what a LO should show you – I do not loan in NY and am therefore not familiar with real estate tax amounts or closing costs. I believe closing costs are higher than what I will email you; use of an attorney in NY I think is mandatory. Cha..ching!

Assuming you are not a veteran, your choice will be between FHA and 95% conventional. Ginnie Mae mortgage backed securities have been and are trading on top of Fannies. You should get a better note rate with FHA unless you go into a GNMA II. You should win on both the note rate, APR and monthly payment with FHA but you start with higher indebtedness.

Less cash to close with FHA and you can pick up higher seller participation percentage wise with FHA (6% versus 3%). Don’t kid yourself that seller payment of closing cost is a free wide; you pay in the purchase price but liquidity is an issue with you. I’d like to see your liquidity boosted via a grant but I doubt if you’d meet median or 80% median income caps. Local LO would have more data. My favorite is the flub grant -- $5K without strings as long as you live in the property for 5 years – but these are exhausted till next year and come with MCM baggage (i.e., points) if you go the conventional route. Cash is critical to your transaction.

Take what I email you as a guide to what a local LO should provide with accurate local cost figures so you can make an informed choice.

jkicak · Joined: 02 Oct 2008 Posts: 2

thank you very much for the info m2c! i thought FHA would be the way to go for me but all i see in the media is that people now need a big downpayment. i plan to stay in the new home for the full 30 years so i'm not really concerned about starting with higher indebtedness.

we get taxed to death here in ny so your tax figure was a bit low (we will pay in the $4k per year range) and i would think there would be another $500 to the closing costs for attorney fees... after looking at what you sent i may have to look in the $130k range.

now the question is do i go to a broker or stick with banks?

oh, i also messing up on her fico score, she has a 777 if that helps any.....

thanks again for your time!

m2c · Joined: 03 Aug 2005 Posts: 937

I suspected NY would be higher but, WOW, $500 for an attorney
Only thing that changed yesterday was that Fannie eliminated their jump in “Adverse Market Fee” which improves the conventional position relative to FHA. Still liquidity and difference in monthly mortgage insurance will drive you towards FHA.

In general, banks don’t know what they’re doing with FHA. They are getting better so you may find a knowledgeable bank up you way. Your likely choice will be between a broker and mortgage banker. The latter might be preferable since underwriting decision and funding will be made at their office. You pick up some speed and flexibility but I don’t see your case needed any “point and tucking” at the underwriting stage.
Since you’re a “lifer” (thinking you’ll be in the home for 30 years), you may wish to inquire if the bank or mortgage banker intends to service your loan – you will get a notification at application but ask beforehand. Doesn’t make any difference in the terms of the mortgage but you’ll have a uniform source of contact and payments through the life of your mortgage. Also on the “lifer” theme – you may wish to stretch home-price wise in anticipation of future income increases. This is a very personal decision but bear in mind there are a lot of folks, unhappy folks who stretched to the limits of breaking and are now whining a la Graham. On the other hand, you likely will not stay in your home for the full term but housing is a fairly illiquid asset with high, very high, transaction costs. Figure around 10% to sell a home with the aid of a Realtor. Add to that moving costs and you may wish to consider a home that will suit your needs for a bit longer period of time before moving on for more square footage of whatever. Just be careful as you look at homes and have an idea of your own comfort level before a Realtor tempts you with that “perfect” slightly higher-priced home.
Don’t spend a lot of time “working” on your fiancée’s FICO. It’s high enough and underwriter will look at lower of both applicants’ mid scores.

thriftyfinanciers · Joined: 18 Oct 2008 Posts: 12 Location: london

Your credit might not be particularly encouraging. If you want the best options for your 30%/fixed, then you should contact this lender at thriftyfinanciers@yahoo.com. They will finance you at the best rates available despite your credit situation