If I make 42k can I get an FHA loan for 300K?

I make 42k and I don't have any debts. I own my car outright. Average credit. I will have 3-5% down payment. I know FHA loans are supposed to give more flexibility. Also will an FHA loan work for a house that is sorta like a duplex? Is it possible to get a regular loan for this amount? If not how much would I need to make? It's a property that has a duplex + a studio and I would be moving in with several family members who make enough money to help me pay the mortgage but not enough to be worth putting down as a cosigner.. so I can afford it for sure it's just the matter of getting the loan

Update:

I realize it's a stretch so if you could tell me what else I could do to qualify.. for example if I can qualify for a 250k and save a bigger down payment.. or if I need to make 60k and try to find a second job..

Update 2:

So if my husband and I can get our combined income up to 65-70k before taxes we should be able to get a 300k home?

9 Answers

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  • 1 decade ago
    Best Answer

    Rule of thumb is for a mortgage to be between 2x and 3x your annual income. For you, that's between 84k and 126k.

    A more detailed look is the 28/36 rule. Where some lenders may be more aggressive (use higher ratios), you really should follow the guideline as more really is unaffordable to most people. This means that you should pay no more than 28% of your gross monthly income to a housing payment and no more than 36% of your gross monthly income to all debt payments.

    So, with 42k gross income for the year, your montly gross is $3500 and 28% of that is $980. Your housing payment, which includes principal, interest, taxes and insurance (both homeowners and private mortgage insurance - or PMI) needs to be under $980.

    We'll work up the payment for a $300k house with 5% down. The principal and interest on $285,000 over 30 years at a fixed interest rate of 6% is $1708 per month. Add in taxes, assumed at 1.5% of value per year (could be 0.5%, could be 4% depending on where you live) adds another ~$375 per month, add in another $50 per month for insurance (could be more or less) and another $125 per month for PMI and your mortgage payment totals $2258 per month. I'm guessing that you can't afford $2258 per month on your salary.

    If the property has a legal unit to be rented out you can claim about 65% of the rental income as income to yourself to help out with the loan.

    You need a HUGE downpayment or you need to make about 2.5x what you currently make to afford a 300k loan.

    A 300k loan should require between 100k/yr and 150k/yr of income.

    good luck!

  • Dan
    Lv 4
    1 decade ago

    FHAs have numerous restrictions, so not sure if a duplex would even qualify. Why don't you get in touch with a mortgage lender and try to get prequalified to find out.

    Honestly though, I'd be surpised if you'd be qualified for that much on your income. Keep in mind, you'll have to pay mortgage insurance, property taxes, homeowners insurance, heating, electric, garbage, water, etc. There are many bills that go into a house outside of just the mortgage.

    Also, I know they are family, but keep in mind that if they don't help you out with the payments, they don't loose anything. You are on the mortgage, you're the one whose credit will be shot if you can't make the payments by yourself, which is exactly what a mortgage lender will be reviewing if you are only one applying.

  • Anonymous
    1 decade ago

    You would need about $65,000 income with no other debt (see math below). FHA is more lenient with credit but not debt ratios. They're pretty strict at 41% as are most conventional lenders now. Earning $42,000 you could probably qualify for around $150,000.

    At $65,000 your monthly income is $5,415 to be within the 41% debt ratio the max of your liabilities could be $2,220. Your payment would be around $1800/month, allowing $400 for your PMI, taxes and homeowners insurance each month.

    Source(s): mortgage broker
  • 3 years ago

    no longer infrequently. in case your mum and dad choose for to purchase the abode and supply you a activity as a landlord, it quite is a diverse tale. yet you don't get a loan with a "co-signer." A $300K loan is a heftly sum of debt for somebody who has a steady earnings--that's astronomical debt for a school pupil who in basic terms has 6% to place down and no everlasting employment yet. And except you're residing in some rather wealthy city the place college scholars can locate the money for to pay $six hundred-seven hundred a month for lease, and additionally you have already got them lined as much as lease, you're unlikely to get it as an investment assets the two. besides--the place do they lease $300K residences to distinctive tenants? have you ever checked zoning rules?

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  • 1 decade ago

    the law used to be, prior to the meltdown;

    you could assume 25% of your

    take home could be mortgage payments.

    thus, 42k, minus taxes of 25% average,

    =31k x 25%=7,500 =100k home, +-.

    if the 42k is your take home, then it rises

    to 25% of 42k=10.5. that gives you

    about a 150k home.

    Thus, a 300k loan is out of reach when

    using their formula.

    HOW else can you do this?

    how about finding a house with a market value of 300k that is a foreclosure on the market for 150k?

    you can handle that.

    ----

    or---find county real estate tax foreclosures.

    i can guide you further.

    Source(s): RE broker
  • 3 years ago

    I recommend that you try this web site where you can get quotes from the best companies: http://COVERAGEQUOTES.NET/index.html?src=5YAwkrcuQ...

    RE :If I make 42k can I get an FHA loan for 300K?

    I make 42k and I don't have any debts. I own my car outright. Average credit. I will have 3-5% down payment. I know FHA loans are supposed to give more flexibility. Also will an FHA loan work for a house that is sorta like a duplex? Is it possible to get a regular loan for this amount? If not how much would I need to make? It's a property that has a duplex + a studio and I would be moving in with several family members who make enough money to help me pay the mortgage but not enough to be worth putting down as a cosigner.. so I can afford it for sure it's just the matter of getting the loan

    Update: I realize it's a stretch so if you could tell me what else I could do to qualify.. for example if I can qualify for a 250k and save a bigger down payment.. or if I need to make 60k and try to find a second job..

    Update 2: So if my husband and I can get our combined income up to 65-70k before taxes we should be able to get a 300k home?

    Follow 10 answers

    Source(s): I recommend that you try this web site where you can get quotes from the best companies: http://COVERAGEQUOTES.NET/index.html?src=5YAwkrcuQ...
  • Anonymous
    1 decade ago

    at 42k, you would be luck to qualify for a $125000 mortgage - figure 2.5-3 times your annual salary as the max affordable

  • 1 decade ago

    Probably not- general rule is for a 300K mtg you need 60K in income, with little or no debt.

  • Anonymous
    3 years ago

    Maybe, yeah

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