Question about getting a small mortgage?

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My husband and I are going to try to get preapproved for our first mortgage beginning of February. The homes we are interested in are 30k-60k. We are hoping a credit union will approve us for a small mortgage. I will not have the funds needed for down payment and closing costs until 2 weeks from now. We dont have a whole lot saved now, but my husband is recieving a large bonus in a few weeks and we are going to be getting tax refund money in about a month. Also parents are planning on gifting us money through paypal to transfer to our bank account to cover for down payment and closing costs. Is that going to affect us getting a loan because it is not money that has seasoned in our account when showing bank statements? We want to apply for mortgage now because rental lease is up in 2 months. We have excellent credit and payment history and have plenty funds to pay on a mortgage, as we are completely debt free. I am worried that they will not lend to us. We are going to try our local credit union. Will it look bad to have money transferred from paypal, and recieve bonus money right before we apply for loan?
Husband is the only one that works. Makes 35k a year not counting 2 bonuses a year, and hes worked at same job for 5 years.

  1. Reply
    May 2, 2011 at 8:59 am

    Make sure the money your parents gift you is in the account for two months or more, and/or they will need to write a letter stating it is a gift and repayment is not required. All sounds fine, except, would you buy groceries is you didn’t have the money in your account? Sounds like you are stretching yourselves very thin financially. All costs associated with buying a house is only a drop in the bucket compared to what you will need once you move in. I wouldn’t be too quick to spend the amount the loan officer says you are approved for, spend alot less. It’s better to start out small, fix it up and sell it in a couple of years. Don’t become another statisitic and lose your first home. Make sure you can afford the everyday, month and year expenses as well. This is your choice, and not the responsibility of someone else to bail you out. Best of luck!

  2. Reply
    Malcolm Dp
    May 2, 2011 at 9:14 am

    With positive credit history, no debts, accumulated down payment, and at least one of you employed you sound like the ideal mortgage candidate. Have you already been house hunting? If not, you should be, to ensure ta ht you really do know the selling prices, and do not apply for a lower than needed mortgage. You may wish to apply at more than one institution to get competitive loan rates, and they tend to give some incentives to get your business (but usually only if they know there is another bidder). You may also look at a mortgage broker who will shop the deal around for you. Your parents may be requested to provide a letter saying that their funds are a gift, and no repayment is expected(this is to confirm Debt Servicing requirements). You can start shopping for a preapproved mortgage now, with condition that funds as anticipated will be forthcoming.

  3. Reply
    Just Me
    May 2, 2011 at 9:24 am

    Honestly, I think you will be a statistic in a year if parents gifting you money is the way you have to get a home. But you have to make that decision.

    Do you have established credit that is at least 24, preferably longer, months old? Do you have at least 3 trade accounts that are in that 24 month category such as a Visa/Mc etc. plus perhaps a store credit card and gas card?

    Good luck.

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