100% finance for a house

I live in US. I would be trying to do the loan in my name only however my fiancé of 10 years would be a 2nd income (has a recent judgment so not putting her on the loan).

I have about 7 years history in my line of work.

My credit score is about 660+. No BK. No charge off. Income is 63k before taxes. But I do have about 400 - 500 monthly debt. 1 car payment, student loan debt and some CC debt that make up that 400+.

I have not owned a house in 2+ years so I am told I may be considered a first time buyer again.

I would like to finance 100% and I am looking at houses right around 300k.

If someone would like to take on this challenge or can recommend someone please let me know.

Thanks!

[Bookie]

This is probably not going to be a forum that will help you with funding. It's not a great time to be a sub-prime real estate loan candidate.

[zetta]

Since real estate is slowing in many parts of the country, it's probably not a good time to do 100% financing, either! You can't count on quick appreciation, and run the risk of going upside down on your home loan.

[disneysteve]

Originally Posted by pablo9567

Income is 63k before taxes.

I would like to finance 100% and I am looking at houses right around 300k.

How much does your fiance' earn and what are her debts?

You can't afford the house on your own income only. That's not to say that the bank won't issue that loan - they probably will as they are ridiculously lenient these days. It just isn't a great idea.

[Aleta]

There was a time many many years ago that Banks and institutions saved people from themselves by refusing to loan money to them unless they could prove certain criteria.

[jIM_Ohio]

Originally Posted by pablo9567

I live in US. I would be trying to do the loan in my name only however my fiancé of 10 years would be a 2nd income (has a recent judgment so not putting her on the loan).

I have about 7 years history in my line of work.

My credit score is about 660+. No BK. No charge off. Income is 63k before taxes. But I do have about 400 - 500 monthly debt. 1 car payment, student loan debt and some CC debt that make up that 400+.

I have not owned a house in 2+ years so I am told I may be considered a first time buyer again.

I would like to finance 100% and I am looking at houses right around 300k.

If someone would like to take on this challenge or can recommend someone please let me know.

Thanks!

Bank is going to look at front end and back end ratio for you only.

Front end: % of income to house payment. Looking for high 30's on front end. 300k 30 yr fixed prices at 1822/month (6.125%). ratio of 38% suggests you need to make 4794 (if I did that math correctly 1822/.38)

Back end: % of income to debt. This should be under 48%. Your debt would be 1822+500 as you suggested. 2322. 2322/.48 suggests income of $4837

4837*12=58044 net pay per year after taxes is what you need. My suggestion is eliminate the debt to make ratio better. Or buy down the interest rate to reduce the payment.

If you do 100% LTV (loan to value), look for an 80-20 program.

80% first mortgage ($225,000) and 20% second ($75,000). This might allow ratios to be manipulated and have you avoid PMI. PMI is private mortgage insurance, and this will be "wasted" money, where as taking out a second on the house allows more money "to work" at paying down mortgage and getting you a tax deduction.

I would suggest waiting, getting more income, paying off debt and/or fixing wife's credit score. If not, it will be tight getting in, you will not have the best interest rate, either (with little leverage to negotiate). Once you are in the house, it's possible to get a better rate by refinancing and buying down the rate (by paying points).

If you are looking to buy, it is a buyers market in much of the country. Builders here are discounting options 80% (that's right, first $50,000 in options cost you $10,000). Look and do not jump at anything... patience will give you a good return.

[disneysteve]

Originally Posted by jIM_Ohio

If you are looking to buy, it is a buyers market in much of the country. Builders here are discounting options 80% (that's right, first $50,000 in options cost you $10,000).

I don't know where the OP is, but at least in this area (NJ), new homes are insane. There are plenty of nice existing single homes available in the $250,000-$300,000 range, but new homes start around $700,000 and up. As a buyer with no savings and not so good credit, a new home might not be the best choice depending on the local market. A better starter home might be a small older home, a townhome or condo.

[Ima saver]

I feel he should wait and aggressively save for a down payment.

[disneysteve]

Originally Posted by Ima saver

I feel he should wait and aggressively save for a down payment.

That would be my preference too. Buying a home isn't a necessity and it certainly isn't an emergency. Far better to save up 10 or ideally 20% before buying.

[poundwise]

It is often folly to say "never" but, at the risk of such, I would say that the best time to obtain a home with 100% financing is, quite possibly, never.

[anonymous_saver]

Originally Posted by Ima saver

I feel he should wait and aggressively save for a down payment.

Complete agreement. I don't think anyone should be a home without at least 3-5% downpayment and a 3 month emergency fund. For me, this would be the bare minimum needed.

[Fern]

I would also wait until your fiance becomes your legal wife before you enter into a legally binding joint agreement like a mortgage.

[anonymous_saver]

Originally Posted by pablo9567

I live in US. I would be trying to do the loan in my name only however my fiancé of 10 years would be a 2nd income (has a recent judgment so not putting her on the loan).

I have about 7 years history in my line of work.

My credit score is about 660+. No BK. No charge off. Income is 63k before taxes. But I do have about 400 - 500 monthly debt. 1 car payment, student loan debt and some CC debt that make up that 400+.

I have not owned a house in 2+ years so I am told I may be considered a first time buyer again.

I would like to finance 100% and I am looking at houses right around 300k.

If someone would like to take on this challenge or can recommend someone please let me know.

Thanks!

By the way, in addition to my suggestions of waiting for at least a 3-5% downpayment and at least a 3 month emergency fund, I would wait until you are at the very least, able to get rid of one of your debts (preferably the CC debt (or whatever is at the highest interest). You make a very nice income, I just don't think you are ready (because of your previous savings/debt) to buy a home yet at this time.

[fairy74]

Can I ask why you need to buy a house right now? To me, 100% financing means you can't really afford the house (and if your fiancee is not on the loan documents, guess who gets stuck with it if something goes sour). Is there a problem with saving up for a down payment? DH and I are not able to afford the home we want yet (live in very crazy CA real estate market) but we are saving towards it. I think you'd be better off to wait if possible...just my two cents...

[disneysteve]

Originally Posted by fairy74

Can I ask why you need to buy a house right now? To me, 100% financing means you can't really afford the house (and if your fiancee is not on the loan documents, guess who gets stuck with it if something goes sour).

This is a great point, particularly the part I bolded. If you are buying the house based on your joint incomes, but only your name is going on the loan, you'd be in big trouble if you guys split up.

I also question why you need a house, but even if you do want one, if only your name is going on the loan, you should only buy a house that you personally can afford on your income alone. If you earn 63K, that would be no more than about 180K, 3 times income. But even that is too much right now if you have no downpayment.

[vsjhoc]

If only your name is on the loan, only your name should be on the title to the house.

[DebbieL]

Wait and save your money. I live in a very bad housing bubble area (Victoria, BC). Prices are insane at this time, but it will crash. I will wait for the fire sale before I buy. Let others go into debt over half a million for something that was $250K six years ago - not me. I will patiently wait for the bank to sell it for whatever they can get once these fools can't make payments. The average household income here is about 60k - it doesn't take a genius to figure out that an average house here shouldn't be selling for over $500K. This will end badly (but not for me).

One example of the insanity (stupidity) of the banks these days. I have a friend who hasn't worked since I've known her (15 years) and is a single mom with 2 young children. She has probably 80-100K in student loan debt, no job, her education is apparently useless for getting her any high paying work, etc. A year ago I had to talk her out of buying a townhome for over $300k. The bank said she could have the loan (she's very naive) so she was going to do it. Stupid. I work full time and I knew that even I couldn't have afforded that loan. The insanity is truly scary.

[disneysteve]

Originally Posted by DebbieL

One example of the insanity (stupidity) of the banks these days. I have a friend who hasn't worked since I've known her (15 years) and is a single mom with 2 young children. She has probably 80-100K in student loan debt, no job, her education is apparently useless for getting her any high paying work, etc. A year ago I had to talk her out of buying a townhome for over $300k. The bank said she could have the loan (she's very naive) so she was going to do it.

I agree that what the banks are doing is nuts, but what shocks me even more is the people themselves. Your example is a perfect one. If this woman had no job and that much debt, why was she even out looking at 300K houses? What was she thinking?

My mom's house has been for sale since June. It has been under contract 4 times. The first two times fell through because the buyer couldn't get approved for a loan. Both times, I saw the offer and the buyers' financial statements and said right away that there was no way the people could afford the house. I have no idea why they even bothered putting in a bid, why the realtor took it seriously or why the bank pre-qualified them.

[Elgin526]

I agree, pay off the CC debt and save up a down payment. You don't need the full 20% that is usually recomended if you don't want to or can't wait that long, but you should put something down, at least.

100% loans can be risky, if your house goes down in value, you will wind up oweing more than it's worth, and then you're really stuck if you have to sell it in a hurry! Nothing like having to write a check at closing when you're selling a house! That happend to the seller of my first home purchase, he had to write a check for $10,000, so I've seen it happen first hand!

[Ima saver]

I think we have all agreed that you really need to look at a less costly house and save as much as possible for the down payment. You can always trade up in houses later.