Likely to get home loan?

Found a house I really like, out in the boonies, just an acre, but big enough. It is a HUD home, needs some work (kitchen & bath) but is priced 45k under county appraisal at 43,500.

Just want to see if I have even a chance at this. my stats, 21yrs old, I gross 3,000 a month (take home 2,400 usually), the only debt I have is a car payment at 375 a month, and car insurance at 219 a month. my credit score is currently 618 but at its highest (before the car) was 690. I was laid off in June from a job of 5.5 years, found new job within 2 weeks and been steady and see no reason to leave anytime soon.

My debt to income ratio is basicly nothing, and I have close to 4k for a down payment.

with what i have here, any chance? and yes, this is my first home purchase


10 Answers

  • 5 years ago
    Favorite Answer

    Your credit score is ok for you to be approved for a mortgage loan to purchase a house. The concern I have is the recent job you just started. If the job is in the same career field you will be ok.For example if you were an automobile mechanic and your new job has something to do with automobile mechanics you would be great.

    It might be to your advantage to seek a FHA mortgage loan as your credit score would be good.

    Buying a house is a step by step process, this is the first step you should take in order to purchase a house. The rest of the steps will fall in place, no matter the type of property you are purchasing.

    In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, you can find one in your local telephone book.

    Make sure this mortgage broker or mortgage banker is able to do government loans such as USDA, FHA and VA loans if you qualify for one. With a VA mortgage loan you are not required to have a down payment, this will save you on closing cost.

    He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

    The amount of your monthly debt payments you are required to pay as per your credit report and the amount of your monthly income earned would be used in a formula to determine what is called a debt ratio. This debt ratio would determine the amount a mortgage lender would allow you to borrow to purchase a house. This debt ration should normally not exceed 39%.

    When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

    #1 One month of pay stubs for each person that will be on the mortgage.

    #2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

    #3 Two years of federal income tax along with the W-2 that match.

    Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

    Make sure, before you get your pre-approval letter, you and your mortgage broker go over all your options, as to all the mortgage programs you qualify for, the interest rate, monthly payments. This will allow you to make an intelligent decision.

    Once you have your pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

    If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

    You should select the loan that best suit your financial situation at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

    What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

    So select the best option for you and your financial situation.

    You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

    Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign. Your mortgage broker will now order an appraisal to show proof of the property value.

    The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.

    After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

    Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

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

    "FIGHT ON"

    • Yes, I did stay in the same field on jobs, so that's good. I talked to my real estate agent today, he referred me to a longtime broker so hopefully this works out. I'm giving you best answer as you actually took the time to answer this. Thanks! wish me luck!

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  • LILL
    Lv 7
    5 years ago

    You have a few problems.

    1. Your credit score is too low. Lenders will not consider you without a score of 640 and up.

    2. Lenders require 2 years of stable employment with the same company or within the same field.

    3. After you car and insurance payments, you take home pay is about $1800 a month. Not nearly enough to pay a mortgage, insurance, taxes, utilities, maintence and you own basic living expenses.

    4. Lenders do not give out mortgages for less than $50,000.00.

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  • 5 years ago

    Depends. Majority of the time if u haven't been on your current job for 2 str8 steady years could be a down fall, they usually want u to have a credit score of $640, but 618 might work.

    Depends on the underwriter tho

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  • 5 years ago

    "County appraisal?" Do you mean for taxes? That isn't really an appraisal. It's a tax assessed value. Not indicative of market value.

    618 is too low of a score. That alone will disqualify you. Get the score up, then everything else seems OK.

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  • Biff
    Lv 7
    5 years ago

    618 will probably be too low to get approved for a mortgage, and only being at your current job for 3 month or so is also going to count against you - you will probably also need more cash for closing costs (3-6% of house price)

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  • Bill
    Lv 7
    5 years ago

    You will have to check with a HUD approved lender to see if you meet their standards. The numbers listed would not meet conventional loan requirements. Good Luck

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  • Anonymous
    5 years ago

    Not sure if you can get a mortgage with 618 credit score...i am afraid you need to increase it, otherwise you will not be approved.

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  • 5 years ago

    If you seeking to get your dream home then obviously you have consult with the real estate agent and they were going to help you regarding this, because they know what are the things they need to do to get home loan and from whom they have consult.

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  • ?
    Lv 7
    5 years ago

    You should be able to swing the deal if you're not out bid Good luck.

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  • 5 years ago


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