Need help financing primary residence

4 Replies

Here's the situation. My fiancé and I are trying to buy a new construction home. We were set to settle on April 30. On Monday, after working with a bank for over a month, we were notified that we were denied due to the fact that my fiancé had a foreclosure in July 2011. (Yes, we were also alarmed it took that long for something that is on her credit report to be noticed by them) Currently, you have to wait 3 years for a fha loan and 7 for a conventional after a foreclosure. The foreclosure was due to a divorce and neither of us have spent time in the military.

We were doing a Fha loan in her name only. We were doing it this way because I purchased a 4 unit property in August 2013 on my own and can't have another fha loan. I also wouldn't qualify on my own for a conventional loan as I don't make enough money.

The most we could put down would be 5%.

We are scrambling now and in a difficult situation.

Does anyone have any ideas and/or suggestions?

Move into the first available unit of the 4-plex. Save like crazy for another year. Get prequal'd for a new mortgage. Start shopping.

If she'll actually qualify at the magic three year mark, looks like you'll have to put it off a few months. Verify that there are no other requirements with that 3 year number, as there may be additional credit score, payment history, etc. requirements. It is mind boggling this isn't come up in first ten minutes when they pulled credit reports and asked the basic questions. May be time for a more competent mtg broker.

Is there a relative that will co-sign the loan with you?

Originally posted by @David Mitro:

Here's the situation. My fiancé and I are trying to buy a new construction home. We were set to settle on April 30. On Monday, after working with a bank for over a month, we were notified that we were denied due to the fact that my fiancé had a foreclosure in July 2011. (Yes, we were also alarmed it took that long for something that is on her credit report to be noticed by them) Currently, you have to wait 3 years for a fha loan and 7 for a conventional after a foreclosure. The foreclosure was due to a divorce and neither of us have spent time in the military.

We were doing a Fha loan in her name only. We were doing it this way because I purchased a 4 unit property in August 2013 on my own and can't have another fha loan. I also wouldn't qualify on my own for a conventional loan as I don't make enough money.

The most we could put down would be 5%.

We are scrambling now and in a difficult situation.

Does anyone have any ideas and/or suggestions?

Options:

#1 wait till the 3 year mark to qualify

#2 get a coborrower will be an occupant or non occupant

#3 try to apply for a 2nd FHA loan with your own credit under one of the 4 exceptions for 2 FHA mortgages available if you qualify

#4 wait and save till you're more comfortable with the qualifying environment 

Curious as to what you did?