Home Mortgage

[gmack]

Fiance and I are ready to buy our first home. My credit is pretty good (745 I think maybe higher). Her credit is crap (520 or something like that). Should I just use my information to get the loan (better chance at lower rate)? Or both our information?

I've been a Chase bank customer for 15 years or so. Do I go to them for loan or a Home Mortgage specialty place? How do I find a good home mortgage specialty place when there are so many? There must be 10 places just on my way to work!

Thanks for any help.

Gary

[RI Builder]

http://reelboating.com/forums/?showtopic=1439

If you can carry the mortgage by yourself, you should apply that way given the credit scores. Otherwise, the lenders will risk adjust your rate based on her credit score.

Your 15 years with Chase means nothing. Ask for referrals in your area for a quality mortgage broker. Be prepared when you speak to them that you know the process. Present them with the following in a neat fashion.

Your full name

Current address and lenght of time at this address

SSN

Place of employment - for at least the last two years (show a full two years worth of work history if more than one employer)

Years at place of employemnt

Title at place of employment

Monthly Gross salary

Copies of your most recent paystubs for two months

Copies of your last two years W2's (assuming you are not self employed)

Copies of your last three months bank statements - all accounts. Be prepared to explain any deposits that do not fit your employment and credit profile

A listing of your known obligations and monthly payment (car loans, student loans, etc.) This will be firmed up with the credit report, however, if you present it now you will show you know the process

The above will get the process kicked off in a smooth fashion.

In this market, with a 745 score, you should be looking at a rate of 4.75% - 4.875% with zero points.

[autobaun70]

Just went through this process myself. Everything RI mentioned above is spot on, and I'll add a few more things. In my situation, I did all of the applications solo simply because my fiancé does not yet live in the area of the house we bought, and speaking to several mortgage brokers & bankers, if you don't absolutely need to show her income, why bother with the additional paperwork. Additionally, depending on the area where you are looking to purchase, you may qualify for a USDA rural development backed loan. The biggest plus side on this type of loan is that there is no down payment requirement, and also no mortgage insurance requirement. The biggest thing, it is based on the number of inhabitants of the home, and their total income. In my case, because my fiancé does not yet live with me, her income did not come into play in terms of the limit. While you won't see quite as good of interest rate going this route (I am just below 5%) you will have the advantage of hanging onto your cash. That said, if you have enough saved up to comfortably put down 20%, you will not have to worry about PMI or take a hit on the interest rate. My situation was that I could have cut loose some investments and stretched a bit to get to 20%, but would have depleted my cash in the process. My take on it is that having a pretty significant rainy day fund available should something happen is very valuable given the current economic situation. I also plan on paying down the mortgage relatively quickly, as I can easily make the payments with my income alone, yet will have 2 incomes available to help pay it down.

[gmack]

Thank you for the advice. I am gathering the documents required and will start calling mortgage brokers in a couple of days.

Gary

[WEAKFISH]

Apply yourself....have the home deeded in your name alone. Once you are married the home becomes marital property by operation of law. Some folks like to have a new deed prepared but it is not necessary. The reason for applying yourself has already been explained. Your credit score alone will get you the best rate. Always be prepared for an unseen event. I had clients that bought homes with a fiance and they ended the relationship. One party paid for everything, but the other was on the deed. If the other party doesn't sign it over, it can be very difficult to get the house back and you would probably need to sell it and split equity. Some brokers are very good and honest, some you need to be careful. Always ask for a good faith estimate in writing showing all the fees. I prefer to use small local banks for financing with a good credit score.

Good Luck and congrats on your pending marriage!