Teresa D asked:


We have 2 medical-related judgements and one from a credit card on our credit report. We spoke to a lender about buying a home and he said every mortgage companay would deny us because the people who have the judgements against us would put a lein on the property until they were paid. Is that true?

ETHAN

Ash asked:


I’m hoping to buy a home in the near future. I have a very good job, but I am currently on contract. I have been here for close to a year and have another year still remaining on my contract, at which time I will hopefully be made perminant. I have $25,000 to put down towards a home and have a good credit score. What are my odds of getting a mortgage? How reluctant are companies to give loans to people who work on a contract?
I’m not working for a temp agency, I’m working on a contract at a University. I’m full time and salary, but after 1 year they do not have to keep me on full time if they choose.

ERNEST

Martin A asked:


One week after our closing date, the Underwriters rejected my loan due to “The value of the home is too much for the area, and there aren’t any comparable homes in the area.”. My Real-estate agent, Mortgage Broker, and the Appraiser all said “that is discrimination based on geographical location” and we have a law suit. This would have been my first home (as of 9/28/07) but they ‘pushed’ the date back to 10/02/07, and at 5:15 PM they told my mortgage broker that the loan was rejected, and they knew since 11:30 am that morning. My apartment lease was over on 9/30/07, so now, my wife and 2 daughters, are homeless; staying at a friends apartment until this gets resolved. The Underwriters pulled our (applicants) credit 3 more times, drastically reducing our credit, which in turn is making us come $5k out of pocket through a different Underwriter. Please, someone tell me i have a case.. We have already invested $2k into inspections, appraisal, etc, and would hate for it to be for nothing.
The house appraised @ $194,600.00 with the purchase price set at $166,600.00. There were 2 appraisals done; One i paid for, which lists 6 comparable homes, and the other that the Underwriters had done, listing 4 comparable homes. All homes in the area are from $130k to $200k. Which is why i am so frustrated as why they would say that. It makes NO sense.
Just in case anyone was thinking that they might have reasonable doubt that i would default on my loan…

I have a 30 yr fixed @ 6%, so the problem with the thousands of people that defaulted on their variable rate loan shouldn’t effect me what so ever. Those thousands of people are all moron’s for letting it happen to them. They should have either;
1- Refinanced into a fixed rate
2- Sold the house BEFORE they defaulted. It is very easy to find out what your payment is going to be 1, 2, 5 years down the road, even with a variable rate loan. Their fault for not planning ahead.

I make enough to pay 2x the mortgage payment, and have been @ the same job for 4 years now (only 21 yrs old). That’s not including my wife’s income, who makes almost twice more than me.

RAY

Kristin Abouelata - Home Loans asked:


When a mortgage underwriter reviews customers’ credit profiles and income histories, what’s happened in the past two years holds a lot of weight as to what their future will be.  And what the future may hold for them doesn’t always count for much at all. At least when assessing risk in mortgage lending. 

 

If your future is difficult to substantiate, your past history is what a mortgage underwriter considers.  That’s why it can be difficult these days for newly self-employed people to obtain loans.  If you start a new business, you have no track record.  Couple this fact with the other odds reflecting it’s highly likely you’ll lose money your first year in business, and you can see why you have to be out of the gate two years before you’re not considered a risk anymore.

 

The history theory is also a hard lesson for people who earn tips as a large part of their income to learn   A lender will ask these individuals what Uncle Sam has on record for their earnings for the last two years.  There’s no way to soundly document what they’ve earned year to date, except for base pay and their two year history.  So, if they’re making a ton of more money in their third year of business, typically a lender can’t substantiate the marked difference in income.  The same can be said for people who are self employed and have multiple business expense and depreciation deductions.  Lenders count the bottom line when the dust settles.  And again, a lender can’t look at year to date earnings to offset what’s on historical record.  Year to date earnings might strengthen your profile, but basically, it is what it is. 

Of course, your credit score is a reflection of your past.  It’s a great indicator of what your future will be.  I guess that’s pretty self explanatory when you think in terms of lending.  Statistics prove that this number pretty much tells a lender how likely it is you’ll pay on time in the future.  It’s a good crystal ball, in general.  So if you have an iffy credit score, you need to work to improve it, and reapply for a mortgage in the future.

Sometimes a lender can look to the future, and it’s to your advantage.  For instance, if you have a debt, like a car payment, that will be completely satisfied in 10 months or less, it won’t count against you when calculating your monthly debt.  The same can be said for child support or alimony that’s about to expire (or at least the legal obligation is about to expire). Likewise, certain payments sometimes won’t count if they’re deferred for a couple of years, like student loans.  In addition, generally, a person can just have started a salary job and provide a pay stub after loan closing.  However, some programs may be more stringent than others where these areas are concerned.

You see, a lender is going to always count what can be verified, not what the future will hold - no matter how rosy it appears.  And most programs these days would require that an applicant be prepared to verify the information, even if the underwriter doesn’t ask for it.  So, be informed when you consider buying a house.  Your credit history can mean the difference between an A+ and a C- in your interest rate secured and ability to obtain a loan.



LEOPOLDO

jen p asked:


I am looking into buying my first home. The med. price for a home in my areae is $600000. When I use the mortgage calculators available on line, I can only qualify for a $195,000. home loan.( can you buy anything for that price?) I make $90,000.00 a year. I don’t understand how anyone can qualify for mortgage with the standards they use. I

JONAS