Can I qualify????????

[larrylock]

Hello all,  I just joined myFico over the weekend and since, I've been addicted to the forums.  This is a wonderful source of information, and I wish I had joined years ago.

I'm thinking now is the time to buy a home for my family, and I'm curious if I need to do more to qualify for FHA so here's my situation.

1. Credit.  My scores 643 TU, 639 EQ, 659 EX (FAKO), wish I had joined soon enough to get my experian FICO).  I have one charge off from June 02 from chase for $4700 (had too much fun in college), actually I worked full time to pay for school because I wanted to avoid SL's, and one collection still reporting from 07 also for $270 from a cable company that I just found out about. I haven't had service with them since 2003, and  I was current with all my payments to them but I don't know what to do with this or what it's for.  This was sent thruough a CA.  My other debts are a car paymet of $310 with $5700 left on the balance, never late since '05.  I have a CC with Bank of America limit of $2700 with a balance of $2000 current for last 14 months.  I plan to pay this off by the end of May, minimum payment of $75, and another CC with Capital One that has a CL of $300 that I use like a debit card.  I'll make a purchase with it then pay the balance downt to $0.  Never late.
2. Income.  My income is 56K/year and I get a bonus every year that's 5-20% of the middle salary of my pay grade.
3. Source of income.  Salary
4. Monthly debt payments.  $310 auto payment, $120 CC payment
5. Employment Full time salaried employee, 5 years this August 
6. Assets/Reserves.  I have enough for 4% down, and my wife is about to settle an auto injury claim for $$$$$$$ and she's willing to contribute up to 20% of loan value. 
7. Location.  Indiana, Hamilton Co. 
8. Property.  Single family home
9. Value. We are looking in the price range of $140K - $200K depending on what I can qualify for.
10. Occupancy.  Primary residence
11. Transaction Type.  This will be my first home purchase

I appreciate any information or suggestions you all may provide, and I look forward to hearing from you all!

Thanks!

[Anonymous]

According to the mortgage calculator I'm using you should be qualified for an FHA loan. You don't have a lot of debt therefore you should be able to qualify by yourself. If you are willing to put 20% down you will be qualified a much higher loan amount. Don't touch the collection just yet let's see what the LO will have to say. My calculator give me an estimated $250K.

I'm not an expert just a guy with a calculator:-)

Laz

[larrylock]

Thanks laz,  I'm kind of worried about the CO and collection, and that I may not have enough open accounts.  But the bright side is not having much debt.

Will that be a large factor into how much I can be approved for or does it depend more on my down payment?

[Anonymous]

As long as you have at least 2 account open you should be fine. The underwriter wants to see if you have a history of making your payments on time. Your car loan will prove that.

Having a score higher than 620 and a good explanation of the Collection should give you an approval. The higher down payment will give you a bigger loan as long as the mortgage payment won't exceed the 30% of your income.

Laz

[larrylock]

Thanks again Laz, I feel more confident with my situation now.

I'm looking to purchase by mid of the summer, anyone know of a good time to approach a LO and get a pre-approval?

[Anonymous]

The pre-approval letter has an expiration date. Usually it's about  60-90 days.  

Laz