Finding the right FHA lender (in Texas)?
Lori O asked:
My husband and I live just a bit north of Dallas, Tx. I’ve been told that different lenders require different things when it comes to requirements. My husband’s score is 586, and mine is roughly 650-700. He signed for his brother’s home but he hasn’t lived there in years, but his brother hasn’t refinanced (even after 2 years of asking) and the bank won’t take his name off without a refinance. I am worried about how this will affect us getting a home. I’ve heard some lenders will not include this in your debt-to-income if you can show that they have been paying for 12 months+ without help. His credit is almost blemish free for the past 2 years (more, but I’m not sure exactly how long) and all house payments have been made on time for the past 6 years. Does anyone know of a great FHA lender in Texas (preferably around Dallas, but will travel if we need to) that will not include the other house into the DTI?
Louise
My husband and I live just a bit north of Dallas, Tx. I’ve been told that different lenders require different things when it comes to requirements. My husband’s score is 586, and mine is roughly 650-700. He signed for his brother’s home but he hasn’t lived there in years, but his brother hasn’t refinanced (even after 2 years of asking) and the bank won’t take his name off without a refinance. I am worried about how this will affect us getting a home. I’ve heard some lenders will not include this in your debt-to-income if you can show that they have been paying for 12 months+ without help. His credit is almost blemish free for the past 2 years (more, but I’m not sure exactly how long) and all house payments have been made on time for the past 6 years. Does anyone know of a great FHA lender in Texas (preferably around Dallas, but will travel if we need to) that will not include the other house into the DTI?
Louise
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2 Responses to “Finding the right FHA lender (in Texas)?”
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Steven
The person you apply for your mortgage through is not the one that make the decision if your mortgage loan application is approved or not. They will have to follow the guidelines as outlined by a FHA underwriter. Therefore it matters not who you apply through.
The only difference you might make a few telephone call and see if there is a FHA lender that has direct approval authority. This means that the company you are speaking with has the authority to make most of the major decisions. For a more complicated problem they might not be able to make a determination, but they have more ability as to making decisions than one that does not have direct approval authority.
FHA is not as stringent as conventional lenders or underwriters so your credit score might be less.
On the DTI ratio if as you say your brother-in-law can prove through bank statements or returned checks that he and he only has been making the monthly mortgage payment for the last 12-24 months the underwriter could waive this requirement and not count this debt that will surely appear on you and your husband’s credit report.
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 benefit to you, good luck
“FIGHT ON”
Edith
FHA currently requires a minimum credit score of 620 (up from 580 in March) so it is unlikely that your husband will qualify. The requirements are set by FHA and not the lender.
Also he will likely have problems with his brothers loan. It will likely be included in his back end debt ratio and may also be an issue if it is a FHA loan (only one FHA loan is allowed at any one time).