Home mortgage question please help!?

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My wife and I are thinking of buying a home I recieved a good faith estimate from a broker. I would appreciate any comments or suggestions on it. It is a VA loan, w/ 30 year fixed rate at 6.280% (float). My Credit Score when checked was 775. My wife and I’s approx. debt monthly w/ minimum payments on CCs is $ 550.00. We are approved on this estimate for $ 204,000.00. It has our monthly payment as $ 1,404.23. With the P & I at $ 1,261.90. On the phone the broker said with the $ 204,000 amount our debt % is 48% which is way to high! My job pays me $ 57,000.00 yearly. What would be a realistic price range for us to be looking at given this figures. Are the rates reasonable? This being our first home we are a bit out of our element. Any advice would be appreciated and I can supply more information if needed.

Thanks,
Jason

7 Comments
  1. Reply
    mudsud
    February 4, 2011 at 2:37 pm

    your monthly house payment – taxes, escrow, P & I and insurance should not exceed 1/4th of your bring home pay

  2. Reply
    Joseph C
    February 4, 2011 at 2:50 pm

    a good faith estimate means nothing, until the rate is locked it’s really nothing. and are you getting 1 loan or 2?

  3. Reply
    sunshine_today
    February 4, 2011 at 2:54 pm

    If you want to play with all the variables and get some mortgage calculations, try using the free site http://www.dinkytown.net

    They have over 250 financial calculators including several mortgage calculators.

  4. Reply
    bob shark
    February 4, 2011 at 3:41 pm

    If you didn’t have any other debts, you should be able to borrow $ 180,000 on your salary, Does your wife work? add no more that 3 times her Salary.

    But if you have 550 Min CC payments, you shouldn’t be borrowing anything.

  5. Reply
    ucla987
    February 4, 2011 at 4:28 pm

    Something isn’t right!

    Your “bottom” debt ratio, based upon your numbers, are 41.141%. This means that 41.141% of your income WILL be allotted to monthly “verified” debt. If this is what is called a “VA No No” meaning that you are not coming in with ANY downpayment” or “closing costs,” then you are just a tad over given that interest rate. With a VA No No, you can elicit a potential seller to assist with not only your closing costs, but also other “help.” Bonuses such as compensation or gifts can also help. If your “other” debt were reduced to zero ($ 00.00), you would qualify for a payment up to 40% with those credit scores.

    Your Mortgage Broker should still be able to assist you by a miriad of options. First and foremost, since your ratios are EXTREMELY close to tolerance levels, he/she can ask for an exception from the underwriter. If the underwriter tells him, “nope” then further assistance can be sought from the lender himself in the form of “Broker Assisted” compensation. This means he/she (the Broker) can pay off your other debt to get you into tollerance levels. The Broker/Agent’s compensation is not only from the origination point, but also from SRP (Service Release Premium), YSP (Yield Spread Premium) and 1 Origination point. Given the numbers you wrote, the Broker’s compensation will be close to $ 6000. Have your Broker check your credit and complete an analysis of your credit by checking the payment/balance ratio and see which would be best to payoff. Have him, you, seller, or some other source, pay that balance off. This will eliminate that specific debt from your ratio and get you into that desired “tollerance” level for the underwriter.

    You are way too close to let that loan amount prevent you from your goal!

    These contributors are off! Exceptions are made in the industry and 40% bottom line ratios are accepted! I’ve closed these deals with less of an exceptional credit score such as your’s at 45% back end ratios (i.e. total debt/gross income).

  6. Reply
    CEESONE
    February 4, 2011 at 5:27 pm

    why are you using your va if you have a credit score of 775?? i wouldn’t use your va, you don’t need it!!

  7. Reply
    smarttrader101
    February 4, 2011 at 6:10 pm

    I used to be a mortgage broker a few years back. My advice to you is…

    If you have a credit score of 775, go directly to a bank to avoid mortgage broker fees. Only use a mortgage broker if you have been turned down by a bank. Mortgage brokers charge fees and mark up interest rates to make money off of you.

    I have listed a site, although its for people with bad credit, but it has detailed information about mortgage brokers and the fees they charge. Goto http://www.mortgageawareness.com and click on the tab that say mortgage brokers. It will help you save alot of unfavorable fees.

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