I need some help here guys! I found an investment property/opportunity to get me started. I've got the business part of everything down, but I struggle with the financial side of things. After reading Brandon Turner's "Book On Investing in Real Estate with No (and low) Money Down" I decided to look into FHA - owner occupied, multi family home loans. I met with a banker (yesterday) and we determined that the asking price was just a little out of my price range (due to student loan debt). Today they dropped the price by $15,000 after only showing for 30 days. I spoke with the listing agent and she told me if I act fast I could offer about $10,000 less, putting it in the $130,000 price range! Which for the market and area is a GREAT deal. The home is in great condition and only needs a nice clean up and paint job, possibly carpet in the rental unit, and 2 refrigerators. The location is perfect, and finding a good renter wont be an issue. The rental unit would cover 100% of the mortgage payment.
Here's where my problem comes in. My credit score is 11 points shy of the requirement, (with my bank) and my income tax / down payment money wont be here until March or April.
Here are my questions! Do different banks ask for different credit scores for FHA loans? Should I try shopping around to see what other banks offer, or is it the same for all banks? Do I have to have the down payment the day of my offer, or can I hope for slow processing times to get all the money together? How else can I find $5,500.00 a few months in advance? There must be a few options for me to make this happen, before I lose the deal. My plan was to wait until Spring to start my search, so I wouldn't have these problems, but I really don't think I will find a deal like this in Spring.
Any suggestions or advice?!! :) Thanks. -Danielle
the fha credit score requirement will be the same regardless of which bank you go to. you do not need to have the down payment the day of your offer, but most will require a prequalification letter from your bank in order to even look at it. I hate to say it, but if you aren't prepped monetarily at this point then it may not happen on this deal. Even if you somehow found a way to quickly input $ into your account, the banks will require two months of statements to ensure that you are not being gifted the money at the last second. Work at improving your score and saving as much as you can and who knows, maybe the deal will sit for another month or two until you are ready. Sorry to be a Debbie downer.
I know when I was looking at Rural Development loans the bank requirements varied. One bank required a 620, while one down the street required a 640; thought maybe FHA loans were the same type of thing.
I totally forgot about the bank statement thing. So say I get a refund check for $5,500 - will I still have to wait for that to sit in my account for 2 months, even though it's obvious where it came from? When I talked to the bank they made it sound like that wouldn't be an issue.
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