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Hi everyone. We are considering buying our first home as we have recently started a family. When we looked at my credit a year ago it was in the 580 range. Since then I has come up and I am wondering if we are in a good position to do this now or if there are more steps we need to take before potentially being approved for an FHA loan?.
If the delinquent marks on credit are from "many years ago" and you've had at least 12 months of re-established on time credit since, then they shouldn't stop you from getting a mortgage. Student loan forbearance/deferment isn't an issue, but it sounds like the student loans are still owing so the exact status (deferment? forbearance? they aren't the same) will need to be known. If it's in deferment & if they will be deferred for at least 12 months from closing on the mortgage then the payment can be excluded from your debt ratio (for FHA & VA financing). If they are in forbearance then a payment would be included on them either way.
Even though the judgment no longer reports to credit (and it shouldn't, since it's over 10 years old) be aware of the statute of limitations, as the title company does a public records search so if it is still owing then they may find it. Plus you also have to answer a question on the loan application that asks if you have any outstanding judgments, so best is if you check to see if it's still owing.
Part-time employment needs 2 years at the same employer to count, overtime income needs a 2 year history to count.
$50k/year of income & $250/mo student loan payment will be fine to qualify for a $130k sales price. If you aren't planning on putting much down then FHA would likely be your best option. Missouri offers a down payment/closing costs assistance program for first time homebuyers too: https://mhdc.com/homes/firstplaceloans/index.htm
Sales price isn't a problem. When you start getting into the $50k range then you'll find lenders start shying away.