Are those FICO or FAKO scores? Remember, for FHA loans you need a MIDDLE score of 620 or higher. Also there are some other conditions like no lates in the past year, no UNPAID judgments, etc. Scores alone do not get you approved for mortgages, so you need to get with a loan officer to have them review assuming the math works.
Now the math....FHA works this way. You can have a maximum house payment equal to 29% of your GROSS MONTHLY pay; however, your house payment and all debt (reported on your credit reports and that will not be paid off within 1 year) cannot exceed 41% of your GROSS MONTHLY pay.
1. 31k / 12 months = $2583/mo gross pay
2. 2583 * .29 = $749 maximum house payment
3. 2583 * .41 = $1059 maximum monthly payments of all debt
4. 1059 - 325 (car payment) - 100 (debt & medical) = $634 actually available for a house payment
On #4 I am making the ASSUMPTION you are only paying $100/mo on your misc debt & medical bills. You will need to adjust this calculation on what the real amounts are to get a more accurate picture.
It should be noted, depending on the state you live...if you exclude your husband from the loan note, you will likely still have to include his monthly debts (per credit reports) in your debt-to-income ratios we calculated above which may further reduce the available money for a house payment. Therefore, it may be beneficial to let your loan officer pull his credit and see if you can use him for the income (and will change all our calculations above...LOL).
Now a few other real quick notes. First off, if you qualify for FHA then you get the same rate everyone else does. Okay, maybe those with 800 scores get a 1/8 (.125) break but it is so minimal especially on a purchase this size that the point is moot. You can go somewhere like bankrate.com which is where I did to calculate your monthly payment based on loan amount. Obviously the loan amount will vary based on your final negotations, but it gives you a good idea. And when figuring your final house payment, you need to factor the following as FHA require you pre-pay home insurance, real estate taxes and mortgage insurance in your monthly payment. If you do put 20% or more down, then you can avoid the mortgage insurance. That being said, here is how I would figure the rest of the calculations:
5. $75k @ 5.75% for 30 years = $438/mo
6. Mortgage insurance: $75k x .005 (1/2%) / 12 months = $31/mo
7. Real Estate Taxes: $1400 / 12 months = $117/mo
8. Home Insurance: $400 / 12 months = $33/mo
9. Total House Payment: $619/mo
As you can see, you are borderline on the 41% debt-to-income ratio. Right now, you would qualify (assuming credit is good) but if things like the real estate taxes, home insurance and/or the medical & misc debt monthly payments were more than figured here, it could quickly flip your answer the other way.
Also I will caution you once again to check on how not using your husband may affect you. It could wreak havoc on you given the borderline situation you are in.
One other thing...I didn't show the $5-8k money your in-laws are going to give you. If you put $5k down on the mortgage so you only finance $70k that would reduce your payments $30/mo. Now by FHA guidelines you have to put 3% ($2250) down on your home, plus pay for closing costs. Personally I would probably try to negotiate with the seller and have them pick up my closing costs so all I had to pay out of pocket is the down payment. Subtract the minimum down payment from the $5-8k your in-laws are willing to help you with and that would leave between $3-6k that could be used to pay off your medical bills and misc debt reducing your debt-to-income ratios and ultimately helping you with the house. But that may be a harder sell to the in-laws. Doing it this way probably will help you guys in the long run as applying all that cash to the mortgage will only save you $30/mo whereas applying the minimum down and then paying off debt with the rest would theoretically save you $100/mo (what I used in my calcs for the misc debt & medical bills) or more. See what I mean?
Lastly, if your in-laws give you this money, get it into your account before you start applying. Anytime large funds are moved in afterwards, they question it and make you sign forms indicating you have no loans or agreements to pay back the large sums of money.
Hope that helps a bit...
Message Edited by pokershark on 07-23-2009 08:48 PM
