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Getting a mortgage & buying a house

Getting a mortgage & buying a house

Old Jan 26th 2011, 2:36 pm
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Default Getting a mortgage & buying a house

I hope this is the appropriate place to post,but if not, mods please move as necessary. I'm looking for advice on getting a mortgage and buying a house over here for US/UK couples.

My husband and I are currently living with my parents, but we're hoping to buy a house next year if at all possible. I've done a search on the forums for "mortgages" and read through Fatbrits Credit/Finance Wiki article, but none of that info seems to be very appropriate to us. It seemed like that was more for UK-only couples looking to build credit. I already know that my credit is excellent, so that isn't a problem.

DH (the UKC) and I opened bank accounts with my local credit union as soon as we arrived about 10 months ago. Yesterday, we got him his first credit card (a Visa) with the same credit union. It's just a regular credit card, not a secured one. The only hiccup was that I had to co-sign for him because of his lack of credit history, but otherwise no problems.

Neither of us is working full-time yet. DH is a teacher and had to go back to college to take a few classes before he'll get his full teaching certificate. Should be done by May. In the meantime, he's been substitute teaching for the last five months. I have been working at a part-time retail job at a nearby mall. Obviously, at least one of us will need a full-time job before we'll get a mortgage.

However, I'm wondering about the length of his residency and short credit history. I've hear varying stories ranging from just three months of payslips to a long as 2 years of working history. I'm starting to worry that even if we do manage to find full-time jobs in the next few months, it still won't be enough to get us approved if DH's work and credit history is less than a year. Also, we're hoping for an FHA loan with our credit union.

Are we being too optimistic? I know a lot depends on the job situation, but I don't want to be disappointed thinking all we need are full-time jobs, if it's going to take a lot more than that. We're also considering taking out a car loan for a bigger car in the next few months, if that would help.

I'm curious to know what other people's experiences have been. Thanks!
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Old Jan 26th 2011, 3:58 pm
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Default Re: Getting a mortgage & buying a house

I believe you can obtain free credit reports once a year from the major providers - that might give you a good starting point to see what your scores are (although you are correct that the length of time you have held credit also counts - so you can have a great score but be turned down because you only have 3 months history).
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Old Jan 26th 2011, 4:15 pm
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Default Re: Getting a mortgage & buying a house

Originally Posted by NatashaB View Post
(although you are correct that the length of time you have held credit also counts - so you can have a great score but be turned down because you only have 3 months history).
Yes, this is my concern combined with length of work history. It's likely that my husband won't find a full-time teaching job until the summer so his work history will be less than six months (excluding the substitute teaching work).

I've already checked my score and it's not a problem. DH's score is currently at zero, but now that he has a credit card it should start to go up. It's really just the length of time that's worrying me.
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Old Jan 26th 2011, 9:54 pm
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Default Re: Getting a mortgage & buying a house

Originally Posted by gatsbygirl8 View Post
Yes, this is my concern combined with length of work history. It's likely that my husband won't find a full-time teaching job until the summer so his work history will be less than six months (excluding the substitute teaching work).

I've already checked my score and it's not a problem. DH's score is currently at zero, but now that he has a credit card it should start to go up. It's really just the length of time that's worrying me.
The score is really not that important though, what's your credit history like? Guessing you're a USC? Have you recently moved back here, or been here all the time?

His score shouldn't make a difference if you have a good one, get the loan in your name and he can co-sign to build up his history.

As for job history, that all depends on where you go for the mortgage, so probably best to speak to an agent to see what they think. Though having 30% deposit should put that problem aside.
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Old Jan 28th 2011, 4:31 pm
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Default Re: Getting a mortgage & buying a house

Hi,
I hope it works out for you.
We're looking to buy a house too. We're both from the UK and moved over 3 years ago and at the moment the limited credit history is hurting us, even though we have 100,000k for a deposit.
Our mortgage broker suggest that with an extra 40k (as reserves) we can get a 450000 loan.

Looking at our options now to see if we should wait for a couple years to have a longer history.
Or getting a mortgage with HSBC and leverage our UK credit history.

If anyone has any better advice that would be awesome!

KK

Last edited by ImmortalNinja; Jan 28th 2011 at 4:34 pm.
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Old Jan 28th 2011, 7:35 pm
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Default Re: Getting a mortgage & buying a house

Originally Posted by ImmortalNinja View Post
Hi,
I hope it works out for you.
We're looking to buy a house too. We're both from the UK and moved over 3 years ago and at the moment the limited credit history is hurting us, even though we have 100,000k for a deposit.
Our mortgage broker suggest that with an extra 40k (as reserves) we can get a 450000 loan.

Looking at our options now to see if we should wait for a couple years to have a longer history.
Or getting a mortgage with HSBC and leverage our UK credit history.

If anyone has any better advice that would be awesome!

KK
I moved to california just over a year ago and got a mortgage with the BoA after about a year of building a credit history. I did have a large deposit though. I don't see why it should take years to get a good credit history, maybe try BoA ??
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Old Jan 28th 2011, 10:07 pm
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Default Re: Getting a mortgage & buying a house

Originally Posted by Prof_Yaffel View Post
I moved to california just over a year ago and got a mortgage with the BoA after about a year of building a credit history. I did have a large deposit though. I don't see why it should take years to get a good credit history...
Because it takes a couple of years to build one up from scratch, using various different lines of credit.

Having a large deposit helps though.
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Old Jan 28th 2011, 11:23 pm
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Default Re: Getting a mortgage & buying a house

Originally Posted by Prof_Yaffel View Post
I moved to california just over a year ago and got a mortgage with the BoA after about a year of building a credit history. I did have a large deposit though. I don't see why it should take years to get a good credit history, maybe try BoA ??
My credit score itself isnt bad. 770 last time I checked.
Its just the history is only 3 years.
During that time I was only able to open one credit card account. I've had three for the last couple of months and have a car loan too.
So hopefully this shouldnt be an issue soon.
And from what I'm hearing banks are starting to be more stringent on their loan applications.....
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Old Jan 31st 2011, 3:02 pm
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Default Re: Getting a mortgage & buying a house

Well I had 1 years credit history, 1 secured credit card, 1 normal credit card to build a score of about 730 and I had no problem with the mortgage.
Must have been the deposit @70% that swung it
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Old Jan 31st 2011, 3:41 pm
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Default Re: Getting a mortgage & buying a house

I guess we'll be living with my parents indefinitely then. We have no savings right now. We're living paycheck to paycheck, and even that's only with both of us working part-time. Every penny we earn right now goes to pay for our health insurance. Assuming he finds a full-time job this summer, we're going to struggle to save $5,000 max for a deposit. I had hoped for an FHA loan, which only requires 3.5% - 5% deposit. This is very disappointing. The media is constantly criticizing young people for moving back in with their parents, but yet in this economy it seems we'll be relying on my parents forever.
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Old Feb 2nd 2011, 5:43 pm
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Default Re: Getting a mortgage & buying a house

Originally Posted by gatsbygirl8 View Post
I guess we'll be living with my parents indefinitely then. We have no savings right now. We're living paycheck to paycheck, and even that's only with both of us working part-time. Every penny we earn right now goes to pay for our health insurance. Assuming he finds a full-time job this summer, we're going to struggle to save $5,000 max for a deposit. I had hoped for an FHA loan, which only requires 3.5% - 5% deposit. This is very disappointing. The media is constantly criticizing young people for moving back in with their parents, but yet in this economy it seems we'll be relying on my parents forever.
Sorry to hear that things aren't going to plan
We've just been pre-approved for a property price up to 400,00 with 20% down and 4 months reserves. Our limited history also added an extra .5% to the the rate.
Not sure if we're going to take it...

KK
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Old Feb 2nd 2011, 11:47 pm
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Default Re: Getting a mortgage & buying a house

Originally Posted by gatsbygirl8 View Post
I guess we'll be living with my parents indefinitely then. We have no savings right now. We're living paycheck to paycheck, and even that's only with both of us working part-time. Every penny we earn right now goes to pay for our health insurance. Assuming he finds a full-time job this summer, we're going to struggle to save $5,000 max for a deposit. I had hoped for an FHA loan, which only requires 3.5% - 5% deposit. This is very disappointing. The media is constantly criticizing young people for moving back in with their parents, but yet in this economy it seems we'll be relying on my parents forever.
We've just arrived over here too and so have 0 credit history - I can't even get a mobile phone plan @ $50pm!

But I'm in no hurry to buy into the USA housing market which quite a lot of analysts believe has another 10% to fall this year and possibly into 2012 (we are in WA).
The costs of ownership and then sale (i.e. Reator fees) in the USA make renting a better option unless you're going to stay for at least 7-10 years.

Try out the NY Times Buy vs Rent calculator and see what it says for your situation;

http://www.nytimes.com/interactive/b...ulator.html?hp

But basically it will cost you 9-11% of the purchase price in fees and taxes to buy and then sell a property over here and so you'd probably need to see at least 2% per year house price inflation to break even and cover the extra insurance, maintenance, housing tax etc etc.
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