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Chances of approval?

Hi all.. first time homebuyers here who are wanting to take advantage of the $8k tax credit.  We are wanting to take an advance on it (allowed up to $6750) to pay down payment/closing costs. 

Income - $65k/yr
Debt - $696/mo (car, credit cards, student loans)
Credit scores - mid 600's (bankruptcy discharged 4 yrs, nothing derogatory since)

Part of our income comes from a monthly stipend plus pay per mile with my husband's job.  It is not taxable, and the pay per mile varies each month, depending how much he drives (anywhere from $250-450/mo).  Will we have a problem with his income? 

Where do we start?  We have an application we have started to fill out with a local bank.  They require $60 just to run our credit.. is this standard?  Do we need to pay this for a pre-approval?
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July 05 2009 - Kansas City
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If you are planning on purchasing your home with a FHA loan, you will still need to come up with the minimum 3.5% down.  And, most lenders do not permit the tax credit to be used for closing costs or down payment. 

Most lenders will not charge you up front to prequalify you.  I would probably look elsewhere or fill out a loan request on Zillow.  Good luck.
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July 05 2009
Profile picture for rosegaliana
Actually, in MO, they are allowing you to use the tax credit for the down payment and closing costs.  A few other states are allowing this as well. 

If you want more information on this, you can check out www.mhdc.com or read more on federalhousingtaxcredit.com which states this under FAQ's:

In addition, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. As a result, some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a down payment. Prospective home buyers should check with their state housing finance agency to see if such a program is available in their community. To date, 14 state agencies have announced tax credit assistance programs, and more are expected to follow suit. The National Council of State Housing Agencies (NCSHA) has compiled a list of such programs, which can be found here.
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July 05 2009
It really doesn't matter what the local or federal government say if the lenders won't do it.  I am fully aware of the recent changes to the tax credit, but HUD will not allow the loan/credit to be applied to the 3.5% minimum down payment and no lenders, I am aware of, are even offering it.
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July 05 2009
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July 05 2009
Profile picture for rosegaliana
Yes.. you should read the article that you asked me to.

"A slew of states - including Colorado, Idaho, Missouri, New Jersey and Ohio - quickly launched programs to allow people to "monetize" the tax credit, by advancing money to qualified borrowers so that they can apply the funds from the tax credit toward a home purchase."

Further down..

"By contrast, state and local housing finance agencies as well as certain nonprofits aren't barred from assisting FHA borrowers with their down payment. They will be allowed to provide short-term loans to borrowers for that purpose under FHA's new policy. But most FHA borrowers obtain financing through a lender."
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July 05 2009
Don't want to argue with you....... but as it stated:

"But most FHA borrowers obtain financing through a lender."

And as I stated:

It really doesn't matter what the local or federal government says if the lenders won't do it.....  and no lenders, I am aware of, are even offering it.
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July 05 2009
Profile picture for rosegaliana
Ok.. but down payment and closing costs aside, as I don't want to argue either.. what about everything else?

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July 05 2009
Most likely won't be able to use the income for the reimbursement for driving.

Your scores and credit look fine.  Debt ratio will depend on the purchase price.  I would recommend sitting down with someone, so they can do a full analysis of your income and credit.

And, I would not pay a dime for it.  There are plenty that will do it for free.

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July 05 2009
 
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