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FHA loan amount

Regular Contributor

FHA loan amount

Does one's credit score have any affect on the amount that a lender will approve you for?  I know depending on the lender it may affect the rate. 

Message 1 of 11
10 REPLIES
Established Contributor

Re: FHA loan amount

I was wondering the same thing. I used a banks website, plugging in my income, DTI, etc. and it generates an amount you would be approved for. This amount was around 180,000 online, but the broker took the same numbers and said around 120000. My income is 48k and DTI is 2%.

 

Im confused... maybe its my score?

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Message 2 of 11
Valued Member

Re: FHA loan amount

I am certainly NOT an expert, but have been inquiring lately about the same thing as we will be buying a new home soon.

 

I believe your income and DTI determines the amount you are able to borrow and your credit score determines the rate and if you actually qualify for that particular lenders loan program.

 

Good look with your loan process and enjoy the new home when you get it.

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Message 3 of 11
Established Contributor

Re: FHA loan amount

That was my thinking as well. Which is why I was thrown off by the major differences in the two. I am contacting another broker tonight and will ask the question directly.

Hope to have an answer soon Smiley Happy

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Message 4 of 11
Regular Contributor

Re: FHA loan amount


jcstarkey8826 wrote:

I was wondering the same thing. I used a banks website, plugging in my income, DTI, etc. and it generates an amount you would be approved for. This amount was around 180,000 online, but the broker took the same numbers and said around 120000. My income is 48k and DTI is 2%.

 

Im confused... maybe its my score?


Hmm 120,000 does seem low, I thought closer to 180,000 for sure, especially with you being at only 2% DTI and current interest rates. Did he figure in taxes, because I'm in Texas and we tend to have higher taxes here?

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Message 5 of 11
Established Contributor

Re: FHA loan amount

I called yesterday on my way home and didnt get ahold of him. Will try again and get info. I have such little debt, and while I dont make a lot of money, I sure dont live paycheck to paycheck.

 

Maybe because around 18k is commision and theyre only using my 30k salary? I'll find out.

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Message 6 of 11
Valued Contributor

Re: FHA loan amount

I believe the max is 33 percent of your monthly gross income. Thats the most your monthly home payment can be with tax and insurance.

Message 7 of 11
Established Contributor

Re: FHA loan amount

I have heard many generic figures like that and 45 x your monthly gross income, but they take more than that into consideration and those are just using the average consumer figures. DTI is a huge factor, income, and the rate.

 

for example, my mortgage payment would be $825 with 2% DTI, and your saying someone with the same salary and 41% DTI would get the same approval amount, but my DTI is below average, and I would think allow me to spend more on my monthly payment.

 

I dont think we'll ever know all of the details, but I'll find out what I can today on my lunch hour.

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Message 8 of 11
Valued Contributor

Re: FHA loan amount

No its 33 percent on the front and 45 percent on the back typically.

 

So if you max out your loan amount you are only allowed 12 percent for your DTI.. So you can't go over 12 percent with your student loans, car payments and CC accounts.

 

If your backend DTI is high it will start eating into your front end and lowering the amount of home you can buy. But if your backend DTI is 2 percent or 12 percent you will still get approved the same amount for your home.

Message 9 of 11
Established Contributor

Re: FHA loan amount

I guess this can vary by lender. The bank I work for (but am not using) bases your approval amount on those three factors, any amount of variety changes the loan amount, according to our LO.

 

So if someone had the same salary but one DTI at 2% and the other at 3% , there would be a difference in the amount. Which may be the reasoning for the differences in the amounts suggested, as my bank approval was around 180k, yet the broker was much lower. Maybe his was grouping me into a category with those of 12% DTI?

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Message 10 of 11