Getting approved for a mortgage?

My mother is looking at a house, it's $250,000 and in a great neiborhood. In June she purchased and is paying for a $28,000 car. Her credit score is 563 but she makes about $3,700 to $4,000 a month. Would she be approved for her mortgage? She's never owned a house before. What would her rate and monthly payment look like? Also, what is she had a co-signer/co-owner that has a credit score of about 600?

8 Answers

  • 8 years ago
    Favorite Answer

    Your mother would be able to obtain a FHA mortgage loan with her score. Her interest rate would be a bit higher than the 3.5% most would be qualified for with a better score than she.

    She should contact and apply for a mortgage loan through a mortgage lender that is authorized to do FHA mortgage loans.

    Mortgage underwriters base their approval on a ratio. This ratio is obtained by the amount of annual earnings of your mother and the amount of debt listed on her credit report. The brand new car would be included since this would be listed on her credit report.

    Her ratio should not exceed 35% of her annual income. This ratio would determine the amount of house she would be qualified to purchase, whether it is a $250,000 or $100,000.

    I am always reminded of a statement when someone mention having a co-signer or co-owner. Unless these two people are married, very seldom do these arrangements work out. The saying is that oil and water never mix as friends, relatives and finances are like oil and water they don't mix very well either.

    Your mother should contact a mortgage lender that does FHA mortgage loans to be pre-approved for a mortgage loan. This pre-approval would indicate the amount of house she would be able to purchase.

    Once pre-approved she would then be able to contact a real estate agent to begin the search for a house.

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

    "FIGHT ON"

  • 8 years ago

    Doubtful she'd qualify with that low of a score and asking for so much. If she works hard for another year at paying bills on time and slashing debt her score will slowly rise making her look like a much more attractive loan candidate in another year. Bringing in a cosigner with a low score won't help much either not to mention the problems of having a co borrower on the title if there should ever be a dispute in the happens... I'd tell your mother not to expect a loan any time soon but still encourage her to talk to her bank or another mortgage institution to have her finances looked over and get suggestions on how best to clean things up in preparation for a mortgage some day. It never hurts to ask. Also, I'd be wary of anyone offering her loans right now because she'd be prone to only getting high interest rates with crazy charges while waiting a little longer could save her a ton of money. When she is ready, make sure she shops around because rates are really great and will be this way for a long time so it'll pay to wait a little longer and then start shopping around for the best offer she can find.

  • 8 years ago

    A credit score or 563 won't cut it, nor will 600. Plus, there is no way $3,700 per month can get you into a $250,000 house. What the heck is she doing with a $28K car?

  • 8 years ago

    With $4,000 a month income and good credit she might qualify for a $100,000 mortgage. $250,000 and lousy credit her chances are less than zero. Frankly, I wouldn't rent her a $600 apartment. I'm surprised she got a car loan.

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  • 8 years ago

    She has negative items on her credit reports.

    She needs to take care of these before before applying for a mortgage.

    If she has unpaid creditors, tell her that they do not simply go away.

    They will sue. They can garnish wages or go after her assets.

    Banks know that this will make the income less, and you will have trouble paying a mortgage.

    Time for her to get her 3 reports and start repairing her credit.

  • 8 years ago

    She wouldn't qualify except through a "hard money lender" at 25% annual interest rate with a 50% down payment.

  • Anonymous
    8 years ago

    Try they have programs for people with blemished credit.

  • Anonymous
    8 years ago

    No.As in no way.

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