Hi,I'm currently 23 years old, and had been living outside the U.S. from 2003-2008. During that 5 year period, I was unemployed and living with my common-law spouse. In August 2008, I was presented with and excellent start-up business opportunity, and I pursued it. I immediately moved back to the U.S. as a self employed individual, and brought my (now wife) with me. The good news is, my business has been a complete success thus far, and I am not in any kind of debt. The bad news is, I have very limited credit, and apparently no FICO score at all.My question is, how will lenders evaluate me based on my limited employment in this country? How will they perceive the situation if I offer to make a 40-50% down payment on the home I want to purchase? How will lenders react if I tell them I can pay off the loan within 15-24 months? I assume that this ending in my favor is just wishful thinking, and that my eligibility will ultimately come down to my FICO and history of employment.Any input would be much appreciated.
Atlanta,GA | Sep 15th 2009
by peachyg...
Answer
by Mortgag...
Hello Peachygeorgian,Well, you have some options. You would potentially qualify for a stated income loan, which simply means that what you put on the application is what you say is your income, but it won't be verified. You could also state your assets or verify your assets. If you want to verify your assets you would normally provide your last 2 months bank statements and any investment account statements (401K, IRA, stocks, etc.) if applicable. I assume you are currently renting and do not own any properties. If it is a private landlord you will usually need at a minimum 12 months cancelled checks, front and back. If you live in a community governed by a property management company, the lender will simply send a VOR (Verification of rent) form to their office to verify rent.There are also loan programs out there that do not even require a credit report or score. All they care about is how much liquid assets you have. In general, the more documentation ou provide the better rates you can get because there is less risk. The less documentation you provide the higher the rates because of increased risk. Even if you have tons of liquid cash and don't want to use your credit it is risky for the bank. I cannot tell you the amount of clients I have had with a lot of money but terrible credit history. They had multiple late payments. Just because you have money doesn't guarantee that you are financially responsible. Along with ability to pay back a loan, lenders want to make sure that you are willing to pack it back. They check that by seeing that you make your payments on time in credit report.As far as down payment, the more you put down the less risk for the lender. So, in summary there are still loan programs out there for individuals with little or no credit and employment history. So, I recommend you do some due diligence and research SISA (Stated Income / Stated Assets), SIVA (Stated Income / Verified Assets), NINA (No income / No Assets), NIVA (No income / Verified Assets). Just remember that with these loan programs do not expect very low rates.Or, if you aren't in a hurry then you could always wait another year or so and that way you can apply for a conventional full doc loan and get better rates. I hope this has answered your question. Rafael A. RinconFirst Trust Mortgage Sep 16th 2009 |
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