Question: I have spent most of the last few days, searching and reading through everything that I can find on loans and mortgages but I am afraid that I may not have enough knowledge about these things, to find an answer.
I am truly sorry, If I sound Brain-Dead, I am.
I have been in a panic for the last two days AFTER I found out that there is a difference between pre-qualified and pre-approved.
I am Terrified that I am going to be turned down on my loan and have no place to go. I have been awake for these two days and Searching. Maybe the following will give you some idea about what I am talking about?
Answer: What you need to do is explain this issue to the loan agent. He or she will make note of it, and follow its progress. If this is the only thing that is an issue with your loan, they will simply track it and either make sure it is cleared up before closing, or make paying it part of closing. I seriously doubt that it will need to be cleaned up just to submit an application.
Red Alert! The loan payment on a $115K loan is going to be in the range of $750 with insurance and escrow. That is more than 50% of your SS money. You need $2500 in monthly income to meet the 28% guideline. In the old days, this would have been an automatic turn-down. Today, anything goes with lending, so they will probably still write the loan. I would expect, however, that you are not going to get a great loan rate. With other people getting 30 year mortgages at 6%, I’d expect to see your loan at 8% or so.
Even if they do offer you a loan, I think that you are going to be house poor. That is, you are not going to have anything left over after paying your house payment and upkeep. I didn’t see anything in here about you funding a retirement account. Nor did I see an emergency fund. Maybe you should be looking at a different part of the housing market. Perhaps a $60K conversion condo would be a better choice. Or a $40K single wide sitting on a lot in the country. You could pay cash for them after selling your current joint and saving up a few more bucks. You could live pretty well on $1265 a month if you have no house payments.
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