I am recently looking to buy a house and went down to a bank for pre-approval process. The Mortgage consultant told me that i could not qualify for conventional loan because i did not have any credit. I have been solid financially and did not have the need to get credit cards and get credit and also was going to put down 15 % for the house i was going to buy. I always bought stuff cash my car and everything else and have no obligation to pay debt anywhere so previous to going there i thought i was excellent and better then people who have perfect credit score since i have a better and solid financial situation then those who have debt to pay. Also i have a good job who pays well so how is it possible that i cannot qualify for the best loan with the cheaper interest but have to pay premium interest and fees on the FHA loan. Anybody opinion highly appreciated especially people knowledgeable in the mortgage industry. Do you think the mortgage consultant is playing tricks on me so he can get me to commit to higher interest rate loan?
yes they based this loan on my gfriend credit with score 680. but how it is possible that my situation with no credit but with a very solid financial background made the situation worse instead of better
I have nothing i pay everything cash and phone is on my bro name insurance my father name and pay him cash
No hidding at all. I have not have the need and payed out of my pocket for everything since i had money in the bank. Thats a good advise tho i will go to the bank i have my account at. The reason i went to the other bank was because online they offered the best interest rate but it seemed they were just bait and switching
I see your point but what about people who have not had the need to get dept and payed everything upfront right away. it just unreal how i am getting screwed because i dont have debt which should make me better then those who do
You always pay cash for everything? Prove it. That’s what a credit report does! You don’t even have a phone in your own name. It’s in your brother’s name and you slip him the cash. You don’t have your own auto insurance — it’s in your father’s name and you slip him the cash. Why is there nothing, not a single one of your obligations in your name? Looks bloody well suspicious, not just "no credit."
Your gf’s credit is not great for a mortgage these days. And you look like someone in hiding.
Did you go to the bank where you have your accounts so that they can see your history of regular deposits of your paychecks, regular additions to savings, etc? Do you have your income tax returns for at least the past 3 years? Those might help, but what a lender really wants is a track record of having a debt and repaying as agreed over a period of time. No track record makes you a big risk.
You should immediately find a local mortgage banker/broker and request for pre-approval from one of them.
These individuals have more than one under wirter to underwrite their loans. Failure on the part of one under writer to approve your request the mortgage banker/broker simply send your file to another under writer.
In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.
Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.
He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.
The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.
When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.
#1 One month of pay stubs for each person that will be on the mortgage.
#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.
#3 Two years of federal income tax along with the W-2 that match.
Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.
Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.
Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.
If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.
You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.
Make sure your mortgage broker explain all your options so you may make an intelligent decision.
What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.
So select the best option for you and your financial situation.
You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.
Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.
Your mortgage broker will now order an appraisal to show proof of the property value.
The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.
After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.
Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.
I hope this has been of some use to you, good luck
"FIGHT ON"
FHA loans also have credit standards. Their main advantage is lower down payments – that’s why the mortgage insurance.
IF you have no credit, FHA will take your loan with alternative trade lines, phone bill, car insurance etc. They are not trying to pull anything on you. What would you rather do.. 15% down or 3.5% down that the rate may be higher? It is ultimately your choice.
you can have a conforming or FHA loan with a manual underwrite but the FHA is the easiest to get at this point in time. Now even putting 15% down you will still have MIP or PMI so very little difference there. Now you will need alternative trade lines such as rent checks as well as utility bills history etc to qualify for either loan
I am a mortgage banker in TN & KY
I’ve been in lending for 20 years in CA and conventional guidelines require a minimum credit score and a credit history. FHA is more flexible, but does have the Upfront Mortgage Insurance Premium. Conventional loans have a Mortgage Insurance if you put less than 20% down. You need to understand that interest rates on a FHA loan should be almost exactly the same as a conventional loan. So if they’re trying to put you in a higher rate, someone is making more money than they should. To be perfectly honest, FHA is a very good loan and you shouldn’t be afraid of it. Purchase the house and establish your credit. Enjoy it!!
Hope this helps.
**Hey Mr. Loan Master above, don’t lead this person down the 80/20 path when you can’t get them anywhere. Or have you not noticed all the changes in our loan programs.**