purchase a home by end of sep 09'
Hey everyone,We are looking to obtain a mortgage and purchase our first home in the next few months (the end of Sep 09 ideally).We have just started to shop around on who can provide the best deals etc, but we are a little confused!My wife is an American citizen and I am a UK citizen (Green card). We moved to California 9 months ago from the UK. As I have only been here for 9 months my credit scores are fairly low in comparison to my wife's.My fico score is 663 and my wife's is 781. I earn $55k and my wife earns $35k (both salaried). As I am the higher wage earner our bank cannot place my wife as the main applicant as their guidelines permit that they have to put the person who makes the most money in first position and use their credit. If my wife applies as a single applicant she doesn't earn enough to fund the $200k we are looking to loan.Obviously this is not very helpful. (I earn more but have a far weaker fico score). We are looking to purchase no more than $200k and we should have about $14k in savings, but we will have to use some of this for closing costs, fees etc.We only have one car on finance $180 per month and no other debts, not even small credit card balances.We have been researching how I can improve my credit score quickly. We have added me to two of my wife's credit card accounts (large credit lines $15k each) and to our savings account as well as my wife's single bank account. We have recently done this so it may take a month or two to update my score.Does anyone have any other ideas on how I can increase my score quickly? (Piggyback or not)We have found a mortgage broker through our real estate agents. They want to work with us but we are unsure as they want 1% of the sale price in fees. We appreciate that they can save you lots of money by getting the best deal, but $2k is a lot of money the work involved their end.Can anyone please let me know your thoughts on using a broker that wants 1% vs. going directly to a bank or lender? Any suggestions on what lenders to use?As we only have about $14k (or will have by the time we are ready to purchase) in savings, we have looked at 95% mortgages and FHA mortgages where we will only need 3.5% as a deposit.Our mortgage broker has informed us that our escrow will be about $300 a month as we will need to have mortgage insurance on either loan (95% or FHA) The mortgage insurance will have to be purchased until we have paid 20% of the 95% mortgage or 22% of the FHA loan. We spoke with our bank yesterday and they informed us that if we were to take an 85% mortgage with them we wouldn't need to have any insurance!Can you please let us know if we do need this insurance or is our broker trying to sell us something that we don't need?I think that is enough questions for you all for now Many thanks in advanced for any assistance you can provide. Please do not feel bad about explaining anything to us in simple terms. As I mentioned above, I am from the UK so this is a whole new experience for me and my wife has never purchased a home.Cheers,Alfie by alfiefromuk09 from Hemet, California. Sep 16th 2009
Joshua Crater (Rate1st.com)
#204 ranked lender in California - 47 contributions
This is definitely more than just 1 Question - If you go through Rate1st.com you will be able to do a Free side-by-side comparison of almost every bank and direct lender in the country, (including Bank of America, Wells Fargo, Citi, Chase, ING direct, MetLife, etc.) Plus get some Free advice on the best way to quickly improve your credit score and get approved to by that house of your dreams. --- 2nd Question - Wouldn't it be better to get a mortgage from my own bank since I already have a relationship with them? Unfortunately, banks don't give their own customers any better rates or preferential treatment. In many cases, the bank you have in mind will not have the best pricing options available at that particular point in the market. Our commitment is to ensure our clients lock in the best loan possible out of the hundreds of lenders available
Joshua Crater (Rate1st.com)
#204 ranked lender in California - 47 contributions
Alfie, Thanks for your detailed question. Your best options given the scenario you provided would be an FHA loan; which allows for the 3.5% (of purchase price) for a down payment. Example: 200,000 x 3.5%= 7000. This leaves you with approx 7,000 towards any closing costs. The national average for closing costs on a 200,000 loan amount is approx 2700. This does not include 30 days interest for the 1 month skipped mortgage payment, nor any funds needed to set up an escrow account to pay out property taxes and home owners insurance. I can provide a more detailed breakdown when you call me. We can provide a zero point option (no 1% fee on top of the 2700 cost). Interest rates are really good right now, even without paying a 1% "buydown" fee! The mortgage insurance added to your monthly payment is a fact. FHA (Federal Housing Administration) exists because they are insured loans. Everyone that has an FHA mortgage, pays into the "pot" of insurance. Your monthly mortgage insurance amount, for an FHA loan, is a standard calculation of 0.55% of the loan amount annually. (ex: 200,000 x 0.55%= 1,100/ 12 monthly Pymts = $91.67 per month. No matter the lender, this will be added to your monthly payment since it is an FHA requirement. This insurance will be paid for 5 years OR until the LTV goes from 96.5% to 78%; whichever takes longer. The insurance will then automatically drop off. Even if your credit score is 663, we are okay for qualifying purposes. Banks typically require 620+ for an FHA loan. You will still receive excellent pricing even though the score is not in the upper 700's! I'd love the opportunity to answer any further question and provide an approval ASAP. My direct contact number is: 949-287-4058 - Brock R. Hicks, C.M.P.S. - Website: www.Rate1st.com - Email: bhicks@rate1st.com
Marco Sepulveda (mspulveda)
#202 ranked lender in California - 5 contributions
Hi i would like to know if you can come out with 20%down,because i have a program with no income verification.Also you will need 2 years of employment in the US.You have only 9 months,si going to be hard.please call me at 925-207-4933.Thanks.
Kirk Anderson (KirkAnderson)
#25 ranked lender in Arizona - 50 contributions
Alfie,All legitimate questions, and I would be more than happy to go through all of them with you, I just think it might be quicker and easier over the phone, so if you would like to, please call me toll free at 877-262-4050 x3777 and we can discuss in further detail. Thanks!Kirk AndersonSr. Mortgage ConsultantBNC National Bank
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