Anonymous asked in Business & FinanceRenting & Real Estate · 9 years ago

Could i be approved for a home loan? ?

I've been working the same job for 15 months. I bring home 2400-3000 dollars a month. It depends on my overtime. My car insurance is $233/ month, phone bill is $105/ month, I have a loan that's $130/month, and student loans are $120/month. My credit is not good because I wasn't making much before. I've been working on my debt ever since I got this job. I paid a credit card and another loan off about eight months ago. I was wondering about how much I could get approved for. I am just wanting to know what my options are. Oh, and im 23 and I am currently living with my parents so I pay no rent.

2 Answers

  • Bob
    Lv 6
    9 years ago
    Favorite Answer

    More information is needed to be certain but some general guidelines may help. You said your credit was "not good". Lenders base the decision on the middle of your three credit scores and while many people would consider a 620 score to be "not good" it is still high enough to be approved for an FHA loan with some loan programs. A 640 score will qualify with many more lenders. If you don't know your score, have someone you trust who has had a good experience with a lender refer you to a good loan officer who can tell you the bets way to get your score to where it needs to be.

    15 months on the job is probably OK to qualify for FHA financing but you need to have a two year history of consistent overtime income before it is considered reliable enough to include toward qualifying. Lenders use gross (before tax)income for qualifying and standard guidelines are 29% of gross monthly income for your house payment and 41% for all debt. Your phone and car insurance are not included in those numbers. Since you said "bring home" $2400 on the low end I assume that to be after taxes with no overtime. If you add back 25% for taxes, $3000 in gross monthly income will qualify for roughly a $870 house payment which would put your loan amount at approx. $110K depending on your taxes and insurance.

    You will also need a 3.5% down payment which must come from your own funds or a gift, and money for closing fees and prepaid taxes and insurance which can be paid by the seller if they agree to. Many states also have bond programs that provide assistance to first time buyers.

    Talk to a good loan officer about ways you can put yourself in condition financially to buy a home.

    Good luck!

    Source(s): Licensed Loan Officer in Ohio
  • 9 years ago

    If you paid off a couple of your debts about 8 months ago and have been paying your debts in a timely manner since then, your credit score should have gone up. It appears as each three months of good payment increase your credit score. You seem to have at least 6 months of good credit. You would need to keep doing what you are currently doing.

    You would need to establish a savings account if you currently don't have one. This savings would be for potential closing cost and perhaps points and fees you would have to pay for your mortgage loan. these fees may vary as some might be paid by the seller if not all.

    There are a few FHA mortgage pamphlets you might find useful. You might google FHA mortgage loans or visit a local mortgage banker/broker that might have these pamphlets available.

    There are many things you should do, the first thing you should do is contact a mortgage broker that does VA and FHA mortgage loans and get pre-approved. This is the first step. Once you have your pre-approval then contact a real estate agent to look at house based on what you are qualified to buy.

    You will need proof of income so have available pay stubs, w-2, bank statements and other items your mortgage broker will require.

    He will inform you of what is necessary once you contact him.

    This pre-approval will tell you the amount of house you are qualified to purchase as well as the interest rate, monthly mortgage payments and other necessary things you need to know about your mortgage.

    If you fail to purchase a house prior to the pre-approval letter expire you may reapply and be reissued another.

    I hope this has been of some benefit to you, good luck.

    "FIGHT ON"

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