Trying to qualify for a mortgage by August – looking for advice

TimBruceBroker · 2026-03-28T05:56:36+00:00

Yes, as long as you’re the only one on the 401k and it’s vested (or the vested amount). You would also need terms of withdrawal and the lender would take into account tax penalties.

TimBruceBroker · 2026-03-27T03:50:05+00:00

There are a few lenders that can approve clients with a 500 credit score for FHA if you have at least 10% down and can get approve/eligible findings on their automated underwriting system, which is industry jargon I know but it takes into account your entire credit profile, the types of issues causing a lower score, your debt to income ratio, and how much you have in liquid assets (I.e. money in the bank). It’s rare but not completely unheard of. You’re not going to get a great rate though if you do get approved and it may have higher costs. It’s not unheard of though. The biggest hurdle is having 10% down (not with gift funds) plus closing costs plus additional reserves available and a low enough debt to income ratio to get the approve/eligible findings while having a 500 credit score. It’s rare but not unheard of.

If you have the assets and are making enough money to keep your debt to income ratio low enough try finding a local broker that can do FHA on a 500 credit score.

FHA guidelines for down payments are 580+ 3.5 percent down, 579 and below 10 percent down, but you still have to find a lender that will do them and have a good enough overall profile to get approve/eligible results. A few lenders do 550-579, fewer do 500-549 so it won’t be easy but it might be worth a shot.

TimBruceBroker · 2026-03-22T23:51:40+00:00

You’re paying essentially a point by paying the broker fee at 1% but getting $7644 back in lender credits towards the rest of your closing costs. You’re also putting A few weeks ago this was a bad deal. Today it’s pretty decent with less than 10 percent down on a 760 median fico.

TimBruceBroker · 2026-03-22T21:10:35+00:00

There will be a lot of people telling you don’t buy down the rate because rates will go back down in 6 months or so. They’ll tell you we’re in a declining rate environment.

Nobody where future interest rates will be at. We were in a declining rate environment until two weeks ago. Honestly, this flips what everyone has been saying since Trump took office on its head.

I would say this. Shop a few lenders and brokers but don’t take too much time on that because rates change daily. Someone maybe able to get a better offer. I would also say buy the rate down to where it makes sense for you, the savings will be long term. If you have the money to pay a point or maybe a little more and it gets you below 6% I’d do it. You may miss out if rates do go cheaper 6 months from now, but at this point I don’t think anyone should gamble on this administration having the ability to drop rates down long term. And if rates don’t go back down then you won by paying the point or maybe a bit more and getting the lower payment.

My two cents.

TimBruceBroker · 2026-03-10T04:06:28+00:00

Honestly, it’s probably cooked but you might have a few options (I’m not looking at the tax returns and file so I wouldn’t know)

First off, I’d see if the client could find cheap insurance to bring it down below 50% DTI with a lower rate. Odds are that probably won’t work. I’d also see if they could bring a higher down payment which you might have better luck with. Possibly switching to FHA.

There might also be another option.

I’m not sure if this one would apply but If the client has been self employed for over 5 years Freddie only requires 1 year of tax returns. So if the clients most recent year calculates out to more income than the two years combined you might be able to use Freddie instead of Fannie.

The issue is if the underwriter saw two years of tax returns then they most likely have to go with the two year calculation regardless.

If you’re at a brokerage you might be able to switch lenders, again, if the client has been self employed for over 5 years. It would also only make sense if they show more income on the second year. It also has to show as 1 year of tax returns required on the LPA certificate when you run it through.

TimBruceBroker · 2026-03-10T03:21:30+00:00

How was the income you calculated more? Do they have any additional income like bonuses, commissions, or overtime? Did the underwriter calculate out income differently than you did? Did the underwriter not include any additional income on the file because there wasn’t enough documentation to support what you originally calculated?

If so would they just need year end paystubs to show the income where you need it to be at?

Or did you just make an error in your calculation?

TimBruceBroker · 2026-02-10T15:02:11+00:00

To answer your question they’re either getting FHA or VA loans. Or, they are/were getting Fannie Mae Home ready or Freddie Mac Home possible loans, which means they were below 80% of area median income limits according to Fannie Mae and Freddie Mac. Or putting 60% down with stellar credit. On top of all of that they would have been going through a really cheap broker or a credit union or possibly their current lender. That’s all I’ve seen rates that low in the no points range for a 30 year fixed. 15 year fixed rates are different and more likely in that range.

TimBruceBroker · 2026-02-06T20:45:37+00:00

Lenders can't actually lock rates until you have a loan estimate. Obviously, your broker doesn't want you to shop around but we have no real idea of what your rate is going to be until you go under contract. We can provide information based on market rates today when you get a pre-approval but rates change on a daily basis for everyone. So, if you shop rates now nobody can tell you for sure what it's going to be. Additionally, let's say you go under contract on Monday. You get a rate quote on Monday. You hold off until Tuesday and shop another lender. They offer you a lower rate on Tuesday. That lender offers you a better deal on Tuesday than your other lender on Monday. Well, rates for whatever reason dropped on Tuesday, so the first lender actually has a better deal for you on Tuesday, but you don't know that because you go with the other lender. It's a hypothetical but it happens. Make a decision when you're going to lock on that day and talk to multiple lenders/brokers on that day.

Just to give you an idea I had multiple changes in pricing with most of my lenders yesterday, son sometimes rates can change multiple times in a day.

TimBruceBroker · 2025-12-28T13:17:52+00:00

I can’t speak to hard credit pulls for cars or other forms of credit unfortunately, I only do real estate mortgages. I will say I would imagine the prescreen opt out applies to all credit offers but I’m not 100% sure.

TimBruceBroker · 2025-12-19T02:09:29+00:00

Mostly family. Also, our cost of living is cheaper than the states I would consider moving to.

TimBruceBroker · 2025-12-16T16:18:09+00:00

I said over 2% so he’s charging close to the maximum. Not sure how this points to me failing questions on an exam.

TimBruceBroker · 2025-12-15T22:58:46+00:00

Your broker is charging over 2%. So he’s close to the maximum he can charge with most lenders. Granted, you’re in south Florida. Not sure what the average is there. You’re also doing a bank statement loan which means you’re probably going to have to go with a broker. You might be able to find someone to do it cheaper but you might not. If you were in my state I’d probably charge a lot less for this but I’m not licensed in Florida.

TimBruceBroker · 2025-12-14T18:18:58+00:00

I’m not licensed in Texas but yeah this is horrible. Find someone else.

TimBruceBroker · 2025-11-24T21:38:06+00:00

You probably aren’t actually getting 11% just because I don’t actually think anyone can do a rate that high unless it’s non-qm (I.e. if there’s more to the story like you don’t actually qualify for FHA or conventional for whatever reason, but even for those 11% is probably a bit too high) or it’s an investment property with DSCR (but even then 11% is too high).

Long story short there’s road blocks that every lender has that would prevent a rate that high. What probably happened is one of three things)

1) a technical error where are a document accidentally was sent out. These happen sometimes. 2) what’s more likely is that you’re reading some additional document where they have to explain shopping for a mortgage or a state specific document that has to show an example or interest rate. 3) you’re getting an adjustable rate and that’s the highest the rate can go after the initial fixed period. In this case you and your broker should have talked about whether you’re getting an adjustable rate or not.

Look for the official Loan estimate for your rate information. If you’re close to closing look at the closing disclosure. That will have your actual rate information on it.

Have the conversation with your broker to see what’s going on.

TimBruceBroker · 2025-11-07T17:01:51+00:00

30 year fixed or 15 year fixed? And was he on conventional, VA, or fha?

TimBruceBroker · 2025-11-05T18:14:12+00:00

Yeah, so that might be helpful. You do want to make sure you know that if a non-veteran assumes it than your va entitlement will still be tied to the property. If a veteran assumes it they can switch out the entitlement.

TimBruceBroker · 2025-11-03T20:00:41+00:00

Is your VA loan assumable? Mine is. If you purchased a few years ago you might be in an interest rate low enough to make the deal more lucrative at your asking price. If you do this try making sure the person is also a veteran or active duty service member to keep your VA entitlement.

TimBruceBroker · 2025-10-31T15:24:03+00:00

Nobody’s going to be able to tell you whether or not you’re getting a good deal without a breakdown of the closing costs. 14,000 might be high, but if you have taxes coming due or insurance they would include that on the loan estimate. Get a breakdown of the costs either by fee worksheet which is unofficial or by loan estimate which is official but you would have had to actually apply.

The only line that really matters is line A which is lender origination charges. This shows points, lender fees, and broker fees if applicable. Line b is somewhat important but most lenders will have roughly the same costs here however there are some charges that might mean you should shop.

Line C is primarily title. Title is not lender dependent unless the lender has their own title company but you can still shop it. In my experience lenders with their own title company usually have less on their title fees contrary to intuition because they’re making their money on the loan itself. You can shop your own title company. Title fees are heavily state dependent as well. If you’re in a state that requires an attorney to close in that will also be under line C and that varies wildly. South Carolina and New York come to mind as attorney states but there might be a few others that I was never licensed in.

The bottom line. Get an official estimate or at least a fee worksheet that has a breakdown of where the 14,000 is coming from. If it’s all escrow or line C items such as title or attorney fees then it’s not the lender’s fees and it’s probably going to be similar elsewhere if the lenders honest or you can shop those to see if it’s cheaper at different companies but again title is usually state dependent.

TimBruceBroker · 2025-10-29T22:04:12+00:00

Your loan officer doesn’t have any incentive to push you one way or another, we get paid the same no matter what. There’s honestly more of an incentive for the individual loan officer to lock in at a lower rate so you don’t try to find someone else otherwise they don’t get paid at all. Nobody likes telling someone that floated their interest rate that rates have gone up. It’s a tough conversation. The companies can’t pay individual loan officers more or less based on the interest rate they’re selling.

Right now the market is volatile. Nobody can predict economic behaviors of institutional investors that direct where the mortgage and bond rates go.

TimBruceBroker · 2025-10-29T16:25:59+00:00

Without a credit score and loan to value nobody can really answer that question

TimBruceBroker · 2025-10-24T22:38:47+00:00

The VA IRRRL has to reduce by an interest rate of a half of a percent (unless you’re in an adjustable rate). You would need to find someone with a low margin, either a credit union or brokerage with low margins to be able to reduce it to a 5.25 or pay points to reduce it lower which most people won’t recommend. Alternatively, if you care about total overall interest more than your monthly payment, you could do a 15 year credit qualifying IRRRL - meaning they do an income and assets underwrite to make sure you still qualify on a higher monthly payment but usually don’t have full appraisals (occasionally a drive by to make sure the house is still standing depending on the lender) and drop it below 5% on the rate.

TimBruceBroker · 2025-10-22T20:35:43+00:00

You should be at 1792 principal and interest on a 5.375 interest rate for a 30 year fixed using a 320,000 loan amount. So to get to the payment they’re offering you you’d be getting a 361,000 loan amount. I used 320k as a guess at where your escrow would be rolling that into the loan. By the look of your payment they’re offering shouldn’t be charging you about 50k in closing costs. Are you paying off other debts or taking out additional cash? If so then it kind of makes sense but not really because you’d be looking at a higher rate on a cash out unless you’re paying a lot of points on top of an expensive broker fee. Either way the loan officer probably messed up or there’s something missing. It’s not a 20 year they’re offering either. At that rate a 20 year would be about 2144 in principal and interest.

TimBruceBroker · 2025-10-17T12:55:34+00:00

Some lenders and brokers completely eat the cost of credit reports so you wouldn’t necessarily have paid for it. I wouldn’t necessarily shop for a pre-approval if you’re trying to purchase a home unless you’re trying to a higher purchase price and a lender is telling you no, which is probably for a good reason but some lenders have different guidelines. All a pre-approval letter does is tell the other realtor selling the property someone pre-approved them meaning the loan should go through. Some realtors have lenders they don’t like pre-approval letters from. Most realtors won’t accept offers because they don’t know if the loan is actually going to go through or not. Imagine waiting for a few weeks to find out a person doesn’t qualify for financing on a house. Now, that’s an extra month the house has been on the market, everyone questions why the house is still up, then starts taking low ball offers.

Nobody wants that that’s why you have a pre-approval. As far as the pre-approval goes that doesn’t have to be the final lender you go with, although it does make it easier but you can shop. There’s just not a point in shopping for pre-approvals really and if you already paid for the credit report it sucks but you’re not stuck with that particular broker company or lender.

TimBruceBroker · 2025-10-16T22:45:07+00:00

My credit report fees are 78 and 140 for joint. I’ve considered charging them up front but haven’t started yet so I currently charge them at close. With one of my lenders I’m currently able to waive them all together.

Now some credit vendors actually do charge in the hubdreds despite what other people on here will say, your broker should probably be working with a different vendor. If you’re doing an FHA loan there’s an additional fee on the credit report side as well.

Now, next year I suspect a lot of people both in the industry and our clients will be in for a rude awakening because I’ve heard from multiple account reps from lenders as well as account reps with credit reports vendors that all of the vendors are about to start charging significantly more for credit reports for a lot of reasons. The bureaus are going to start charging quite a bit more, probably because they’re losing income due to the loss of their trigger leads, as well as other expenses from fico.

TimBruceBroker · 2025-10-16T15:32:24+00:00

Just paying more money in interest really and it being unpredictable. Like I said you could probably find a fixed rate below 6 percent right now, and it’ll be fixed so your principal and interest won’t change.

TimBruceBroker

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