Can my husband and I get a house loan if we have 4 1/2 years left on a $750 car payment (32,000 left) and?

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$ 12,000 in credit cards. We have about $ 28,000 in savings at the moment and are trying to move to San Antonio, Texas. We can pay off the credit cards and rent for a year which would have done but we are having non money related renting complications (totally different issue- no comments on it please!!) or we can pay off some of the credit card debt and put down 2,000- 10,000 dollars. Also, what is considered a good interest rate on home (mortgage) loan? Only serious answers please!! 🙂 We have average credit (we are 20 and 21) and make between 3.000- 7,000 a month. (self employed) verifiable by bank statements.
Sorry for all the questions- 1 more. How long does it take to get a loan for a house?
I am totally in a bind… need to move there in a week due to unforeseen events.

  1. Reply
    February 15, 2011 at 9:09 am

    If you need to move in right away, rent. You can probably get keys the same day (if you start early) or the next. The paper work is usually short and you just need enough money for the deposit. Contact a realator and tell them you need to look at some rentals, they know where the nicer places are. If you go and try to buy, you will end up buying in a location you wont like and get stuck with a house you dont want for a long time. Get a 6mo to a year rental and look around for a house to buy during this time.

  2. Reply
    February 15, 2011 at 10:09 am

    It sounds like you are going to have to do some type of low doc loan for financing based on you stating the income is verified by bank statements. Before you do anything I would go to reputable bank and see what type of loan you qualify for and what type of down payment would be required. If your main goal is to own a home talk to the lender and see what they can do for you. A full documentation loan in today’s market is 6.25% for a 30 year loan. If your income is unable to be verified and depending on your credit scores your down payment will be higher as will the interest rate.

  3. Reply
    All Knowing
    February 15, 2011 at 10:52 am

    Sorry for the long answer:Keep your money for a down payment on your house, unless the lender requires you to pay off debt to approve you.  Your lender will let you know what you have to do.  The lender will look at your income to debt ratio.  All that means is they take your total income per month and see if your bills come to more then 40%-50% of your gross income.  For example, if your average income over the last year was $ 5000.00 per month then the lender does not want to see more then $ 2000.00 – $ 2500.00 in bills per month.  The lender will figure all of your bills you have now, plus you new mortgage payment and they do not want to see more then 40%-50%.  As far as rate is concerned F.H.A. loans are a little under 6% right now but unless your credit score is pretty high, over 700, you will probably not qualify for that rate.  If your credit score is 650 or higher with no major negatives on your credit, i.e. bankruptcy, late payments, repo’s, medical bills or charge off accounts you should be able to get a rate in the 6.5% to 6.9%.  You are self employed and that will get you a little higher of a rate sometimes, but not much, maybe as high as 7.5% depending on your credit score, as long as you can prove your income you should get the lower rate.  Your bank statements will help, but you will need 2 years tax returns as well.  You have probably heard the term “no doc loan” before.  It does not mean “no documentations” any more, with the current state of the mortgage market you will need documentation to prove your income.  With all of that said, it is not that hard to get a mortgage, find a good mortgage company that will let you know what your fee’s are up front, a good faith statement, and shop around, get the lender that can not only give you the lowest rate, but also the lowest fee’s.  I have closed on my personal loans in as little as 1 week, but a good lender should be able to close within 1- 2 weeks for sure.  After you get into your house get your credit cards paid off.  You are 20 and 21 $ 750.00 for a car per month is pretty high.  You may want to think about selling your car, especially if it makes your debt ratio so high you can’t get a house.  There is plenty of time for fancy cars later on, you guys sound like you have a lot of things going for you, don’t get tied down with expensive cars that only lose value every year.

  4. Reply
    February 15, 2011 at 11:38 am

    If you need to move within a week then you’re in trouble because it will be tough to get a mortgage that quickly. You’ll also have a hard tome if you write off most of your income for tax purposes and have not been self-employed for at least 2 years. If that’s the case you’ll have to go “stated documentation” and need at least 10% of the sales price for a downpayment. My advice is to rent.

  5. Reply
    February 15, 2011 at 11:56 am

    As long as the lender is willing to accept the credit score and all monthly payments are affordable.

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