Do I qualify? If so, how much?

[Anonymous]

Hello myfico. Long time lurker, first time poster. I want to stop renting and build equity. It will be my first house, I plan to live there for a bit and then rent it out. Rinse and repeat. Any input is great.

My first question is do I qualify? If so, how much? Then, does anyone know any lenders in my area that does not require to payoff old charge offs? They are set to fall off soon. I admit my fault, but I think its better financially for me to not pay.

1. Credit - I have 3 charged off accounts with balances with about $6000 in total. A ~$500 medical collection account. A few other negatives that are paid off. They are very old and are set to fall off in 2015.  I do have 4 credit cards showing paid as agreed & and auto loan also great payment history. My score is about 670.

2. Income - I make about 35-40K depending on the year.

3.  Source - Employed, hourly plus commission.

4. Monthly debt payments - $500 without rent. This is car payment plus min payments on credit cards.

5.  Employment - I'm W2 and have been same employer 4 years

6. Asset Reserves - I have a 401k I'm considering using as my downpayment. Its about 20K, vested, and able to take loan if needed.

7. Location - Harris County, Houston, Texas

8. Property type - Condo/townhouse/single family home *whichever is in a price I can afford

9. Value - This is one I want help to determine how much I can afford given everything else is okay. I want to down about 5%.

10. Occupancy - Primary residence.

11. Transaction Type - Purchase

[ShanetheMortgageMan]

With 5% down, conventional financing, and $40k/year of income, you would probably be looking at about a $100-105k max sales price for a house.  For FHA you'd probably be looking at about $140k max.  Condos would be a lower price point, because they have a monthly HOA fee that needs to be paid.

[Anonymous]

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@ShanetheMortgageMan wrote:

With 5% down, conventional financing, and $40k/year of income, you would probably be looking at about a $100-105k max sales price for a house.  For FHA you'd probably be looking at about $140k max.  Condos would be a lower price point, because they have a monthly HOA fee that needs to be paid.

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How does FHA allow you to budget 40K more?

[ShanetheMortgageMan]

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@Anonymous wrote:

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@ShanetheMortgageMan wrote:

With 5% down, conventional financing, and $40k/year of income, you would probably be looking at about a $100-105k max sales price for a house.  For FHA you'd probably be looking at about $140k max.  Condos would be a lower price point, because they have a monthly HOA fee that needs to be paid.

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How does FHA allow you to budget 40K more?

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It permits higher debt to income ratios to qualify than conventional does.

[Anonymous]

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@ShanetheMortgageMan wrote:

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@Anonymous wrote:

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@ShanetheMortgageMan wrote:

With 5% down, conventional financing, and $40k/year of income, you would probably be looking at about a $100-105k max sales price for a house.  For FHA you'd probably be looking at about $140k max.  Condos would be a lower price point, because they have a monthly HOA fee that needs to be paid.

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How does FHA allow you to budget 40K more?

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It permits higher debt to income ratios to qualify than conventional does.

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Oh, that makes sense. Thanks.