Mortgage Questions

[firstsource]

I am a loan officer, by choice dealing mostly with clients that are "credit challenged", most of the loans I do are sub-prime or the step above called "alt-a" (where the programs are less strict than prime, but cheaper in rate than sub-prime)

I enjoy answering questions about loans, I will get back to you quickly (except on Sunday) with the answer, if I don't it is because I don't know the answer and have to do some research.

Looking forward to helping in any way I can.

Best Regards,
Charles

[cybercrusader]

Thanks Charles, I'm sure you're info will be very helpful.

Although this is a place for scam annoucements. Maybe debt settlement or credit repair? Or maybe we need a new section on financing and mortgages?

Anyways, welcome.



[Edit by cybercrusader on 1056310632]

[smogtek]

charles,

While I'm already in the process of a home loan I'm sure there's a bunch of others here that would appreciate the info.

We're hoping that Kristy will set up a mortgage forum once she feels a bit better.

Oh, wait. One quick question. I'm going VA "no-no", but my realtor thinks the appraisal may come in low because apparently that's what some VA appraisers do believing they are "helping" the vet. Is there any way to "help" the appraisal along so it comes in where I need it to?


[Edit by smogtek on 1056315636]

[firstsource]

When I submit a request for an appraisal, there is a indicator on the form stating " Estimated Value; $ ", " Loan amount: $" and that figure has what I am looking for. The LO (loan officer) can ask the appraiser to let him know if he will check comps (comparisons) and let him know if the appraisal is going to be within 5% of the value. We can not legally request a price/value, and I found out the hard way, we can not personally argue with the value that is given.

So, to that extent you can, or the Loan Office can, help the price along, by making sure that the figure is REALLY what price you are looking for.

Charles

P.S. Yes, I have talked with NightStar, and she thinks that Kristy will set up a place where people can go to. I am on another one, and it has been a lot of fun, rewarding, and I have learned from it.

[kb9tbq]

Hey Charles, nice to see you hopped over, lol

This is NightStar aka kb9tbq :p

*** I beg to differ on this section being for scams / that is another section here for them. This section covers a mix of everything.

So the more we get, for mortgage issues - we will ask Kristy for that new section :-)

Take care, talk to you later.

[firstsource]

Hi Nightstar,
That is funny, I ended up telling you to ask you about me.
Yes, I am looking forward to Kristy adding a new topic section, but until then, maybe people will come to this section to ask quetions. Otherwise I do have the other site to keep me busy.
Charles

[kb9tbq]

General Section I think will work quite nicely, since the off topic section moves way to fast - peoples questions could easily get pushed down, not everyone realizes that they need to bump to keep their post on top.

If we catch them in the other sections - just point them your direction.

Oh - and Charles nice to see you this direction, you will find that this board moves in real time, they will respond just as soon as you post here most days. :)

Also let you know this is a more agressive group then what we see on the other side of things, agressive as far as knowing or least learning tricks of the trade for cleaning up their credit.

Hope Brian don't mind - I took quote from him to let others here understand what you look for to answer questions regarding mortgage.


If you want an accurate guess regarding your situation, make sure you include important details.

ITEMS TO INCLUDE:

CREDIT~
How is (it) in last 12-24 mths? 1-4 ie 4=bad.
How many accounts do you have? What is the biggest starting balance that's still open? How long was/have account(s)(been) open?
Any lates on rent/mortgage in past 12 months?
any lates on credit? 30, 60, 90, etc...
any bankruptcies, foreclosures, charge off's, collections, judgements, liens, etc...
~be honest & specific~

CAPACITY~
Where do you work? how long? how much $ do you make? can you verify w/ w-2 or tax return?

COLATERAL~
What are you trying to do? Purchase, refinance? How much down? How much is house worth for refi, what is purch $ for purchase? if refi, need to know how much you want to borrow against value. 80k on 100k value home is 80% (LTV.) You don't need to say 80% ltv, but you should include you want 80k of 100k.

If you are having trouble applying for a mortgage or getting turned down, specify what people are telling you. Don't guess. You must ask why.

If there is more you think needs to be added be a good thing to do so now: Try to make sure they give you all the best of info to reply with the best of answers.

[browneyedgurl4]

HI there, thanks for helping credit challenged people like me! My boyfriend would like to be financed for a first time mortgage. How hard would it be to get him financed? His scores are around 630. He has 2500 in bad debt. He is currently paying a car loan with a balance of $7000 still. He pays $400 a month in child support and his income is approx. $35000 plus overtime. He doesn't have much to put down. Maybe he could come up with a few thousand. What are the odds of him getting around $80-85000 and at what kind of rate? Thanks in advance. Jen

[firstsource]

He can get a 100% loan from a sub-prime lender with no problem from what you have told me. No bk's, no judgements, just 2500 in collection accounts. He may have to pay the collection accounts down, depending on the lender. He will have to pay some of the closing costs, but he should be able to negotiate with the seller that the seller will pay most all of the remaining closing costs.

His income looks good for a home that price, if that is all of the debts that he has.

He will need to be able to prove that he pays his rent on time, either by copies of canceled checks, or if he lives in an apartment, then the lender can get a "verification of rent".

Rates? That depends on what his credit score shows up/how it looks to a lender.

One thing that you need to know however, if he has a 630 credit score from a consumer report place, his score when a lender pulls it, can be as much as 40 points lower. Also, lenders for sub-prime go from the middle of the scores from all three bureaus.

Good luck, if you have any other questions, please feel free to ask.

Charles

[browneyedgurl4]

I forgot to include that he has a judgement that was paid off 4 years ago. I know that will hurt him too. but when i pulled his cr from experian it didn't even show up. Anyways, thanks for the input. Where do we start? Do we find a house first or try to get financed first? Sorry if i sound ignorant. Jen

[Kylie]

Hey I found it! Thanks kb for arranging this! I really think this is the deal!!!

[firstsource]

I would suggest you arrange financing first for several reasons.
1) That way you know what you can afford, and this way you will be able to be conservative and not go over the limit of what you can comfortably pay. Sometimes it seems that people find their dream house and have such high payments that they can not afford the other stuff that makes it all worthwhile

2) Many realtors don't want to spend time with people unless they know that they can afford the homes they are looking at. So a pre-qual letter is a great thing to have.

As long as the judgement is paid off, there is no problem with having had it.

Don't worry about asking what you may consider "dumb" questions. Better to know the answers than to make the mistakes you could have avoided by being educated. I have a person doing my web site, even though I know how to make a page. She is an expert and I am sure that I ask many a "dumb" question, but at least that way I know what is possible and what I can afford to have now and in the future.

Best of luck, Thanks for letting me help you
Charles

[Kylie]

Hey Charles-

Bottom line...is there hope for those of us who are struggling with mid 500 scores to get a mortgage? I know its not that "black and white"....but I read/hear so many diff stories/information.....not sure what to believe.

[TylerDurden]

Hi Charles, welcome! ( Thanks, KB9!! )

Quick question, are there lenders out there who will be willing to look at TU reports only? My problem is that I have an erroneous chargeoff which I'm still trying to clean up from my EX and EQ. It's recently been deleted from my TU. My TU has no negatives, my TU FICO is about 730-ish (gosh, I just don't have it with me at the moment). As for my EX and EQ reports, the chargeoff is the only negative thing. EX FAKO score (02/03) is 675, and my EQ FICO score (05/03) is 655. Any chance a lender would consider my TU report only? TIA.

[firstsource]

No prime lender would, and that is what you qualify for, (as long as no BK's, if you have some assets, and if your debt ratios qualify), These consumer reports are hard to translate into mortgage lender ones (or for that case, into insurance, or other services) but normally it is about 20 points lower. So your mid score should be over 640, and that works.
Charles

[Kylie]

<blockquote>Originally posted by kylie

Hey Charles-

Bottom line...is there hope for those of us who are struggling with mid 500 scores to get a mortgage? I know its not that "black and white"....but I read/hear so many diff stories/information.....not sure what to believe.
</blockquote>

Bumpity..........still waiting for Charles to answer......

[kb9tbq]

Ok, sry over looked - be back, :p

[firstsource]

A general answer is yes, You can get financing with 500+ scores. Sounds good right? Here is the catch. Depends on where in the 500 range you are. If in the lower range, then you are looking at being able to borrow less of the sales price/appraised value (whichever is less) For instance: If you have paid your rent/mortage payments on time, and you havce a 520 FICO score, you can just borrow 75% of the price. At 540 ges up to 80%, at 560 90%, at 600 95%. There is another lender that will go 80% with a 500 score, Then there are other lenders that will go 100% on 600 Score. So, yes there is hope and it can be done. Depending on where you live, you can arrange seller financing for the balance of what the lender will give you.

What I deal with mostly is sub-prime, and I can tell you that they are not easy, but most of the time there is a lender that will take a 500+ score. And I have one that does, in some cases, under 500 scores.

One final comment is that lenders have "guidelines". Not Rules. Guidelines. Nothing is hard and fast. One lender gives up on a type of program, and then another lender adds that program.

I don't quote rates on the internet, for a number of reasons. I will do my best to not let you get "ripped off" however. and will do my best to explain the ins and outs of my business.

Charles

[Creditinfo123]

I wish we had read this, before buying our house maybe we would have had a better bargaining ground. Nevertheless no regrets. Hey Charles, everything you are saying is well appreciated. And for those who are looking to buy a house, I will say listen well to Charles. Believe me, when you are buying a house, some of the information provided here, can tend to enamor you against some shady lenders or so called " builder lender" they are not always on your side. ALways remember that. I am speaking from a little experience that I so recently happened to have been through. What I am working on now is kinda like a HEL/HELOC, I dont know which is better, in addition I need to know what I need to do to get it. Score requirements and other things. WIll they tell me that I just got a mortgage and i cant get it or what. I need the experienced minds on this. THanks

[SpoonyNix]

creditinfo123, what is a "builder lender"?

[Kylie]

Thank you Charlies. I know for me....it helps to know that there IS hope!! I've read so much on this board and others and while I'm just beginning the "clean up" process, its a long road to the 700 club, and I want to buy in the next 3-4 months.

[firstsource]

A builder Lender is simply a broker or lender that is owned by the same company that owns the builder. Like everything else, it can be a good deal or not, but just be wary, and compare with other "independant" brokers.

"Get a free kitchen upgrade" if you use our lender. Ok. If it REALLY is free, then somebody "ain't gonna pay their bills". Right?

So, the term builder/lender should make a bell go off in your head.
Not saying that it is a bad thing. Maybe the fee goes into really making the home cheaper. You just have to check it out.

Charles

[newstart18]

Charles is on the money regarding the builder/lender relationship. One good example is a builder I'm familiar with that has it's own in-house lender as part of the same parent company. They offer $3000 off of the build cost ONLY if you use their mortgage lender. Pretty hard to pass up, and they get about 75% of their builds to go this way. What most people don't realize is that they get hammered on closing costs, almost $2000 more than if they had shopped around. Add an extra 1/4% in interest and your $3000 "savings" is about gone within 2-3 years, and after that you're losing money. Closing costs are a huge rip off in mortgage lending. If you look closely at your GFE, you'll see things like "administration fee, document prep fee" that can be greatly inflated. This also applies to appraisals, surveys, and even points. So, don't just shop the loan, shop the associated costs as well.

[SpoonyNix]

I'm wondering about the builder lender thing because I'm going to build at least a couple of houses for resale this year. I'm not big enough to have in-house financing, and don't really want to be a lender anyway. Think I'll track down a couple of lenders that deal mostly w/ builders and try to work something out with them.

[newstart18]

New construction, the quickest way to build fast equity there is, especially if you find land at a good price. I've got friends who built and sold 4x over about 8-10 years, when they built the last one they owned it outright! The builders I know all seem to have their own favorite loan officer they like to deal with, who is with a lender that handles construction loans. The builder gets good construction loan deals, then steers his customers to the lender for their loan.

[sisflomi]

I will post on new thread.

[Edit by sisflomi on 1057126565]

[firstsource]

Hi Spoonynix,
One thing I thought of is that maybe there is a builders assoc. in your town or area, or maybe you could visit some builders in your town or in a close by town, and see if they can recommend a local bank that you can work with. Construction loans are different in a lot of ways from "take out" loans that consumers get for their homes. Construction Loans are much shorter time period, but have increased risk to the lender, due to the fact that in 90 days or so, things may have changed in the local or national economy, and you will have trouble selling the home you are building.
If you will put a business plan together that includes how you plan on selling the homes prior to them being finished, that will help you "sell" the lender.
Charles