Good Credit Score In Relation To No-doc Mortgage Application?

Q: Also, this has been mentioned couple times here, but what is considered a good credit score in relation to no-doc mortgage application? I mean, it can go all the way up to mid 800s. Is 800+ what gets considered? And, lastly, if no-doc is not the option, applying for the new one as an investment property seems the way to go. Is the application process any different? I guess, I would have to say that in WILL NOT become my primary residence then. What would happen if I actually move in?

A: I don't understand your aversion to a No Doc Loan. It sounds to me like the perfect solution for you. Get a 5/1 Interest Only with no prepayment penalty. This gives you a 5-year fixed rate interest only loan that should be more than managable even with your other mortgage. Once you move in, you make double payments for a few months while your current house is for sale and in escrow. Once that house is gone, then you have one payment, and some extra cash flow that you can use for improvements -- landscaping and such. When you get your house all worked into shape in a year or so, you will have gained equity that will take your Loan To Value from somewhere in the range of 80% down to 50% or 60% -- depending on market conditions in your area. You don't need any of the cash out of the house, just a simple rate-and-term refinance. On a No Doc, the loan officer fills in your name on the form and sends it in. It's much simpler than the Full Doc loan that most people get. To be sure, the No Doc might come with a bit more interest, but as I outlined above, you're gonna refi out of it in a year or so, so the interest isn't a big deal, and it is required to avoid some other discomfort that you don't want to deal with. While the No Doc has some short-term costs (higher interest rate by a fraction of a percent), it also has huge benefits to your personal situation.

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