for how much would i qualify on a FHA loan?

i have 603 of credit for how much would i qualify on a FHA loan

Update:

i qualified for 300k im about to buy my first home thank god allah akbar

13 Answers

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  • 2 years ago

    That depends on your income. Credit score determines your rate,

  • 2 years ago

    Your credit score would not play that much of a role in the amount you would be approved for to purchase a house. Your credit score would primarily be used to determine you interest rate.

    The factor that would determine the amount you would be approved for to purchase a house would be your debt ratio.

    The only figures used in calculating the debt ratio is the debts you are required to pay listed on your current credit report and your monthly income you earn to pay these debts, based on the pay stubs you provide the underwriter as proof of your income. This is called the front end ratio.

    The back end ratio is when your monthly mortgage payment is then added to the debts listed on your credit report and your monthly income is calculated to come up with your debt ratio.

    Your back end debt ratio should be no higher than 39%. The ideal debt ratio would be 35% or below.

    Buying a house or other property is a step by step process, this is the first step you should take in order to purchase a house is to be pre-approved or pre-qualified for a mortgage loan, by contacting a local mortgage lender. 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 lender, you can find one in your local telephone book or google for one followed by the city and state in which you reside.

    Make sure this mortgage lender 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 assist you in the filing out of the mortgage loan 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 listed your credit report and the estimated monthly mortgage payment would be added together. Based on your monthly income a formula would be used to determine what is called your debt ration. Your 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%. A good debt ratio would be 35%.

    When you speak with the mortgage loan officer 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.

    You would be required to use a local title company that would make sure there are no additional liens on the property take care of all the legal recording at the county recorder's office. You should be sent a title deed in approximately 14 business days, by the title company used to close your sale transaction.

    The down payment of a house would depend on the mortgage loan program you are approved for.

    There are many and varied mortgage loan programs available to you than just the conventional mortgage loan, as well as the down payment required of each mortgage program.

    #1. Conventional mortgage loan

    Normally 5%-10% down payment.

    A. 20% down If you want to avoid Private Mortgage Insurance (PMI)

    #2.FHA mortgage loan

    Normally 3.5% down payment

    There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

    #3. VA mortgage loan

    There is no down payment

    You must have been in the United States military active duty, veteran, or retired.

    There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

    Also your credit score is not used in determining your eligibility to be approved for a VA mortgage loan.

    #4. USDA mortgage

    There is no down payment required

    Normally to be approved for this mortgage loan the property you are purchasing must be a farm or rural property.

    There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

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

    "FIGHT ON"

  • 2 years ago

    Per FHA guidelines 580 is the minimum score you need to get a loan (for 3.5% down, technically you can get a loan with a lower score but it becomes very hard to actually do) but though your numbers is a little above that it does not mean you will qualify with the lender and as many people have stated you probably need a score closer to 620. Still, no harm talking to a mortgage broker and asking but just because they say they can make you a loan doesn't mean they really can. You could go through months of trying to buy a place only to be turned down at the last second which means you may want to up your score before even trying to get a loan - go find a good mortgage broker about how to do that too.

    The "how much" is determined by your income and debts and the ratios they are at, which you don't even mention.

    • linkus86
      Lv 7
      2 years agoReport

      The 580 score was true back in the old days, but not since the crash.

  • tro
    Lv 7
    2 years ago

    that score will not get you a loan unless you have a really good and reliable job and you have a good down payment

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  • 2 years ago

    $0

    Your credit score is too low to qualify for a loan you need a 620 middle score at the very least, and you also need to have 12 consecutive months with no late payments. If you do, you usually have at least a 620 middle score too. And that is the goal you need to seek before thinking of applying. How much you can borrow will depend on your debt ratio (how much you have coming in vs going out. The rule of thumb is that if you have no debt at all, you can borrow up to 3 times your gross annual income (average of the past two years), but then again may not be comfortable with the payment you would be required to pay for such a large loan. FYI you will also have to pay off or become current on most of the derogatory debt on your credit report. This is the money you owe to people you have forgotten about, or blown off. There are some exceptions so be proactive and talk to a lender first. If you get lucky and find a good loan officer they will guide you to get your qualified, but it could take up to an entire year.

  • Ryan M
    Lv 7
    2 years ago

    Are you really dumb enough to think that your credit score is the ONLY factor that goes into how much you qualify for?? Think hard...if me and you both have a 603 credit score but you make $25k per year and I make $125k per year.......you REALLY think that we are in the same ballpark as to how much we may each qualify for?? Math is hard...I know.

  • 2 years ago

    You need 620 credit.

  • Judy
    Lv 7
    2 years ago

    Depends on a lot of other things, starting with your income and your other debt.

  • Jack
    Lv 6
    2 years ago

    No way to know. It possible to have an 800+ credit score and not qualify for a mortgage.

    Qualification is based on:

    - Credit history (your credit score and associated data that goes with it)

    - Ability to repay (your income)

    - Your debt to income ratio (how much you owe relative to how much you earn)

    - Conforming property (some property will not qualify for ANY standard mortgages)

  • 2 years ago

    "How much" of a mortgage someone would qualify for is largely based on their income.

    Unfortunately, your credit needs to be in the 620-640 range for a bank to consider an FHA loan.

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