Question about home buying....

MJB · Mar 26, 2007

So, we're looking to move across the country and buy a house. I realize we probably won't be able to claim any income for me and the whole loan approval will be based on my wife's salary..

But, do they give ANY consideration to the fact that we will, in fact, have a budgeted amount of student loans for room and board for me?

Would it be best to try to buy a house before quitting my job?

mshheaddoc · Mar 26, 2007

Loans do not count as income by any standard unfortunately by any lender that I know of. So your options are:
1) getting the loan while you are still employed (but make sure that your loan doesn't require updated paystub and you haven't given your "notice" - it can cause issues with VOE's (verification of employment)) or
2) going no-doc

also moving over to the finance forum as this isn't really a financial aid question ...

MJB · Mar 26, 2007

Can you tell me more about no-doc? I'm not familiar with those types of loans.

I was looking to probably go with an 80/20 loan if at all possible.

mshheaddoc · Mar 26, 2007

No doc loans are loans where you don't need to state income or assets. You could go with a state asset, no income loan as well.

These loans might be hard to go by as the alternative lending structures are changing as companies are doing away with these alternative loans as the credit of americans is changing. Right now the mortgage industry is plagued witih foreclosures for many reasons.

The limited document or no-document loans are pretty much credit based so you need to have at least a 700 credit score (most likely - some companies you can get away with a 680 but i'm sure that is going to change soon.). Also, getting 100% with these loans might be a little tricky as well. If I remember correctly, my company would only do up to 95% LTV. Our company was extremely lenient in underwriting as well so I imaging that the competition had more stringent underwriting guidelines.

If you want an 80/20 and won't be moving very far (you could "claim" that you are going to commute to work) I would go conventional if you have good credit. Make sure you will have your job so you can submit your necessary paystubs. If you are moving to another state, then you would have to pull the "2nd home" deal most likely which would be a higher interest rate.

If you are looking 80/20 and do not own a home, I might suggest going goverment. There is no PMI and minimal fees (they can be rolled into your loan) and you can get up to 100% financing. Its a great thing for first time homebuyers.

MJB · Mar 26, 2007

mshheaddoc said:
No doc loans are loans where you don't need to state income or assets. You could go with a state asset, no income loan as well.

These loans might be hard to go by as the alternative lending structures are changing as companies are doing away with these alternative loans as the credit of americans is changing. Right now the mortgage industry is plagued witih foreclosures for many reasons.

The limited document or no-document loans are pretty much credit based so you need to have at least a 700 credit score (most likely - some companies you can get away with a 680 but i'm sure that is going to change soon.). Also, getting 100% with these loans might be a little tricky as well. If I remember correctly, my company would only do up to 95% LTV. Our company was extremely lenient in underwriting as well so I imaging that the competition had more stringent underwriting guidelines.

If you want an 80/20 and won't be moving very far (you could "claim" that you are going to commute to work) I would go conventional if you have good credit. Make sure you will have your job so you can submit your necessary paystubs. If you are moving to another state, then you would have to pull the "2nd home" deal most likely which would be a higher interest rate.

If you are looking 80/20 and do not own a home, I might suggest going goverment. There is no PMI and minimal fees (they can be rolled into your loan) and you can get up to 100% financing. Its a great thing for first time homebuyers.

I love the 80/20 loans as i'd rather have my money going to anything but a private mortgage insurance company....

I hope my wife can start understanding why I want her to find a job down there so badly...

mshheaddoc · Mar 26, 2007

Yeah I would suggest she find one ASAP b/c that will also help you in the home finding process.

:luck:

Jocomama · Mar 27, 2007

Be careful
Just been speaking with my old managers and colleagues at several banks - the 80/20 doctor loan is going to become scarce.
With the New Century debacle, and the hit on HSBC subprime unit, not to mention Wall Street not buying many of the 20mil packages bundles, less lenders will be offering no doc at 0 down.
Start looking for the 10% down no doc, or the 0 down full doc.
Just spoke to the ex-regional of New Century's Home 123, who is now heading for Countrywide after New Century closed its doors.

mshheaddoc said:
Yeah I would suggest she find one ASAP b/c that will also help you in the home finding process.

MJB · Mar 27, 2007

We would be looking at the conventional 80/20 if we could get it.

I don't see any point in putting anything down if I'm going to have to pay PMI anyway (because we don't have 20% down).

TommyGunn04 · Mar 27, 2007

Bank of America, Suntrust, and several other large national / regional banks have "doctor loans" programs (different from the "no doc" option mentioned above, as no-docs typically have significantly higher interest rates). These allow you to qualify for a loan without current income, as long as you'll start making money in the subsequent few months. They require you to furnish a copy of your contract or some other proof that you'll have a certain salary, and will approve your loan based on this. They also don't count student loan debt against you the way that other lenders might, since you have much higher income potential as a physician compared to most borrowers. The "doctor loans" programs also typically waive PMI and require NO down payment. The downside is that in order to provide this benefit they typically charge a slightly higher interest rate. BUT, it's often a better deal than doing an 80/20 or a standard mortgate with PMI, because physicians are a lower risk group default-wise, so they can afford to give you a better rate without PMI compared to the typical borrower.

Run the numbers to see which fits you best, but if there's a Bank of America in the state where you're looking to buy then you should definitely look into the program. It worked very well for my situation.

Jocomama · Mar 28, 2007

1. Because of what is going on in the market, many of the 80/20s are either getting removed from banks, or the rates are going up.

2. Read the news - some major **** hit the fan because subprime, but a great deal of the real estate market is dropping, and the ability to retain home values is diminishing, so less banks want to cover 100% of the home.

3. You are not understanding PMI. 5% down, means a 1st loan (as if you were putting down 20%) and a second loan to cover the 15% you don't have as downpayment. THere is NO PMI.

Summary - if you can qualify with your debt/loans, new income and house you want to buy, then by all means go for the 80/20. However, it all depends upon student loans.

PS - Last week, Bank America increase the % they are using to qualify student loans, and if it doesn't show up on the credit report, their underwriters are hitting you with a higher value.

The industry has taken a hit. Unless you got FICO >720, be careful with the 80/20

MJB said:
We would be looking at the conventional 80/20 if we could get it.

I don't see any point in putting anything down if I'm going to have to pay PMI anyway (because we don't have 20% down).

Question about home buying....

MJB

Senior Member

mshheaddoc

Howdy

MJB

Senior Member

mshheaddoc

Howdy

MJB

Senior Member

mshheaddoc

Howdy

Jocomama

Make 'em bleed!

MJB

Senior Member

TommyGunn04

Full Member

Jocomama

Make 'em bleed!

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