Anonymous asked in Business & FinanceRenting & Real Estate · 2 years ago

Would someone like me qualify for a home loan?

I live in an apartment with my husband & 2 kids, so I really don't want to renew the lease again. I want to move into a house but I know nothing about where to start. We have low income (under $2000/mo) and fair credit. Are there certain income requirements you need to have? And who would I get the loan from, my bank? Any bank? How likely would they approve us? I just need info, I don't know where to begin.

14 Answers

  • 2 years ago
    Best Answer

    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"

  • Anonymous
    2 years ago

    NEVER go for the top dollar in your range for comfort and sleep each month. You should be looking in the 60K range. If you have other debts it is doubtful you can even get a loan right now. The ONLY way to know is to go to a lender and work with them and your paperwork and figure it out. Just do not be talked into a loan over tops 70K.

  • Anonymous
    2 years ago

    Have you talked to a realtor about helping you through the process? Find one you feel comfortable with and work with them. Maybe something in a small condo would be better for you? Just be careful your savings aren't eaten up by Homeowners Association fees (monthly expense that pays for lawn maintenance, recreation facilities, community events, etc.). You also need to work with a bank or credit union on financing. Meanwhile, keep the bills paid and your credit looking good. Have luck.

  • 2 years ago

    Yes, there are income requirements and with only fair credit, expect a high interest rate. How much money do you have for a down payment? IF you qualify, you won't qualify for much house. All you can do is apply to see if you qualify and how much you qualify for. Don't expect to qualify for a $200,000 house, or anything near that. I don't know where you live but, if you qualify, it will likely be nothing more than a tiny two bedroom house, not any bigger than an apartment but, you would own it.

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  • Eva
    Lv 7
    2 years ago

    You would not be able to buy a home through regular channels. Your income is too low and you don't have a down payment. That said, there are programs out there for low income, first time home buyers but you have to search them out. You also might want to look at Habitat for Humanity and see if there is a chapter in your area or they may be able to refer you to another program.

    • ?2 years agoReport

      I do have a down payment with my huge tax refund that I get each year. I don't have a single debt either. But I'll look into it more

  • 2 years ago

    What savings do you have?

    To qualify for a mortgage, you need savings of at least 5-10% of the property value. You can generally borrow up to 3 x your annual income (depending on your credit rating, debts etc)

  • 2 years ago

    You income is so low that you wont qualify for much, if anything. Still maybe housing prices are really low where you are. You could always call up a mortgage broker and go over your situation with them. A good one will tell you what you can afford or what you need to do in terms of income and credit to be able to get a loan. Then you can go from there.

  • 2 years ago

    Where to start is at your bank. Walk in and ask about qualifying for a mortgage. Someone will sit down with you and go over your income and debts and tell you how much of a mortgage you qualify for is you have GOOD credit. Each of you will need a credit score of at least 600. You will also need at least $3,000 - $5,000 in cash to cover the closing costs, first year property tax and homeowner's insurance, and small down payment. With your income, you probably won't qualify for a mortgage payment of much over $500. If taxes are low where you live, you still might find something priced at $60k or under.

  • 2 years ago

    That is an extremely low income and you wouldn't qualify for very much....I doubt you could afford anything other than a rental at this point.

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