I have been approved for an FHA loan in which I have to bring 3% to the table. The home was appraised $6000 less than what I originally offered. He does not want to come down on his price because he will not be able to pay off his current mortgage, of which he will be about $6000 short after closing costs and fees with price being at the appraised value. He is currently trying to work out a deal with his lender to give him a short sale on the house. Since all of this has transpired, I have increased my credit score to the point that I am able to qualify for more mortgage programs. Should I check with some local companies to get into a better program with less fess than a the broker I used? Im somewhat leery of doing this because I don't want my current l mortgage company to see that I was shopping around if we would close under the current terms. And I don't want any inquiries to hurt my score. I WANT THIS HOUSE. Any suggestions on making this deal work would be appreciated.
2007-10-21 11:33:58 · 5 answers · asked by Renaisannce Man 1 in Business & Finance ➔ Renting & Real Estate
You should always shop your rate and fees with other mortgage brokers! I don't care if the first broker you spoke to was a friend or family, if they have a proffessional bone in their body they will understand but aren't likely to find out anyway. If you don't want any more inquiries into your score, be sure to grab a copy of the report that has already been done to share with the other brokers.
Still, there is a loophole in the fha rules that allows for you to buy with no money down. The rules state that the seller can't pay your downpayment, but doesn't say that a thrid party can't pay it for you. These specific non-profitorganizations exist for this very purpose. you jack up the price of the house so that the seller pays all your closings costs, the down payment (FHA minimum is actually 2.25%) plus the amount of the service fee which the non-profit keeps (usually about $400), and give you the down payment which you give to the seller. It is completely legal and I have helped buyer clients with this deal dozens of times.
But better than that, each state has a government program aimed at lower income buyers that actually gives you money for your down payment and or closing costs. The money is actually given to you as a small second mortgage that you never pay a dime on and is foregiven over 5-7 years. It is definitely the best deal out there and if you meet the income requirements, you would definitely be good to go. Plus the program offers better than average rates on the primary loan too. Beware, mortgage brokers sometimes do not mention this program because they are either not one of the approved lenders or would just assume not suggesting it because it requires more work and offers less comission.
2007-10-21 11:54:46 · answer #1 · answered by linkus86 7 · 0⤊ 0⤋
If you really want this house, the last thing you want to do is jump out of the frying pan into the fire with some other lender. If your broker has encouraged you to use FHA, then I believe he is legit. If you haven't read the news lately, 100% financing can cause whole lot of trouble because the payments are high and they only work initially because lenders use "teaser rates" to get you in the door. Inquiries from other lenders will drive your credit score down and may cause you to loose out on the FHA you've already been approved for. And lastly, given your current credit score, you probably won't qualify for a conventional loan, no matter what the down payment is. If you want this house, stay put and let the chips fall where they may.
2016-05-24 01:42:53 · answer #2 · answered by margarite 3 · 0⤊ 0⤋
Fannie 100% ..should allow for that credit score ..there is also a 103% Fannie/Freddie program these and the FHA will allow seller to pay CC or you can also still do the Down payment assistance programs
2007-10-21 11:43:36 · answer #3 · answered by mortgagesaver01 4 · 0⤊ 0⤋
Try MyCommunity it's 100% and the PMI is very low.....it's a government program. The rates may be slightly higher than FHA.......it may be better than a Fannie Mae Flex 100
2007-10-21 12:08:52 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Possibly with a 726 , but even that would be a stretch .
You are borderline sub prime and lucky to get any loan .
Be grateful FHA will let you in for 3% .
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2007-10-21 12:01:14 · answer #5 · answered by kate 7 · 1⤊ 0⤋