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Hey Mortgage Experts and Homebuyers,
Can anyone share their experiences on the lowest FICO score you know to pass through FHA Autmated Approval? Also, what were some of the other factors/variables (downpayment amount, low DTI, reserves, low "shock" payment, etc.) that may have helped the application through automated underwriting, even with a low FICO?
Thank you in advance!
- FICO updated below
- Income is $2600/gross from my "9-5" job (since 2003), and I also run a home-based tax preparation business (since 2006) between Jan-April that generates an average of $12/k per year. So I average $3600/month. Is this how it would calculated?
- Current rent is $890/month
- NO Car payment (at least not on credit report, lol)
- $6000 downpayment - $2000 savings and $4000 gift from community organization
- reserves will be $1100
- Credit Reports the following:
CREDIT CARDS
- CC #1 $659/$1000 $40/month
- CC #2 $0/$300 PIF 12/31/08, hasn't updated on reports yet
- CC #3 $0/$250 PIF 12/31/08, hasn't updated on reports yet
- CC #4 $639/$850 $36/month
PERSONAL LOAN
- Bank #1 $1142 $142/month, last payment due in 8/2009 (less than 10-months)
STUDENT LOANS
- Sub/UnSub, total 6 student loans All deferred until 2012, while I'm still in school
COLLECTIONS
- Student Loan #A PIF and closed since 2003
- Student Loan #B PIF and closed since 2005
So with this additional info. what do you think? Will it pass automated? Will it pass manual? If so, how much of a loan to actually expect? BTW, I will only look at properties where the seller is willing to pay 6% closing costs.
@Anonymous wrote:
CREDIT CARDS
- CC #1 $659/$1000 $40/month
- CC #4 $639/$850 $36/month
I know this wasn't your question but if you're looking for a few extra points for padding, you might get them by paying your other two credit cards off or nearly off. They are at high-ish utilization now, especially #4. Not that I would touch your reserve funds, but if you can make more than the minimum payment on #4 that would be good.. Hopefully paying off #2 and #3 gets you a few points too when they report. Good luck!
Assuming your tax prepation business nets $12k/year after expenses, not just grosses it, then a two year average is taken.. and then if that equals $1k then $1k would be used. Items such as declining income, erratic income (such as one year significantly different than another) can throw out a year and just base it on a 12 month time period.
As long as your debt to income ratio sticks to the 31/43% rule you should be fine, anything over that you would start needing to have reserves. Since I don't know what your sales price range is or where you are looking to buy, I can't say if you can qualify for the type of home you have your eyes set on, but assuming a 1.5% tax rate, $60/mo for homeowners insurance, and a 3.5% down payment, 5% interest rate, and using $3,600/mo of qualifying income, a $155k sales price might be where you cap out at... your housing portion of the DTI is about 31.3% with that scenario using a payment of $1,125/mo.