What are my chances of getting a FHA Loan?

[Denny33142]

I have been repairing my credit for the past 6 months and while my profile has been improving it has been painfully slow, the reason why i want to buy a home is because rent here in Florida is very expensive ($1200/M for a 2 bedroom), i currently give my parents $600 per month in rent which i feel is a waste of money since it is about the same amount i would be paying for a mortgage in a better home.

My credit profile is as follows:

EXP: 625 EQ: 606 TU: 630

Average age of accounts: 6 months

Total Utilization: 12%

Positive Accounts:

Public Savings Bank: Open Never Late

American Express: Open Never Late

Capital One: Open Never Late

First Premier: Open Never Late

Negative Accounts:

Bank of America: 1 year old Paid Charge Off ($600)

Credit Protection Association: 2 year old Comcast Unpaid ($120)

Income and debt:

Income: 26K Per Year

Debt: No Debt or Payments

Loan amount i am looking for:

Loan Amount: 70K-90K

Down Payment i can give: 6K

What do you guys think?

[JM-AM]

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@Denny33142 wrote:

I have been repairing my credit for the past 6 months and while my profile has been improving it has been painfully slow, the reason why i want to buy a home is because rent here in Florida is very expensive ($1200/M for a 2 bedroom), i currently give my parents $600 per month in rent which i feel is a waste of money since it is about the same amount i would be paying for a mortgage in a better home.

My credit profile is as follows:

EXP: 625 EQ: 606 TU: 630

Average age of accounts: 6 months

Total Utilization: 12%

Positive Accounts:

Public Savings Bank: Open Never Late

American Express: Open Never Late

Capital One: Open Never Late

First Premier: Open Never Late

Negative Accounts:

Bank of America: 1 year old Paid Charge Off ($600)

Credit Protection Association: 2 year old Comcast Unpaid ($120)

Income and debt:

Income: 26K Per Year

Debt: No Debt or Payments

Loan amount i am looking for:

Loan Amount: 70K-90K

Down Payment i can give: 6K

What do you guys think?

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IMO it is hopeful, you may have to bring up your scores a little more depending on the lender and probably bring down your debt a little more. 12% UTIL may be a little on the high side for your DTI with your income.

[StartingOver10]

I don't know where you are in Fl, but before you jump out there to look for homes, check the real estate taxes and hazard insurance (as well as mortgage insurance) and HOA fees first. The hazard insurance here is very high and is directly dependent upon the construction of the home, the age and type of roof, the age of the home etc. It is not unusual for insurace to be in the neighborhood of $1800 to $2400 per year for a very low priced home. The real estate taxes for the same home can be $2000 to $5000 depending upon the actual location. Most properties in S Fl are located within HOA communities and those fees are also included in the monthly payment calculations. You can look at homes that are the very same price, yet have two vastly different payments depending upon those factors above (taxes, insurance and HOA fee).

I am not trying to rain on your parade, just introducing some real figures into your equation. If you know what to expect, it will make the process a little easier. The P&I portion is actually a small part of the overall loan. It is possible to get a loan with the monthly PITI and HOA pmts less than $1200, but you will be looking at less than $150k and more likely less than $130k especially if there are high taxes and an HOA payment.

You might want to meet with a loan officer first. Get a GFE showing all the figures including costs to close and pre-paids so when you go to look you go with full knowledge.

[CS800]

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@Denny33142 wrote:

I have been repairing my credit for the past 6 months and while my profile has been improving it has been painfully slow, the reason why i want to buy a home is because rent here in Florida is very expensive ($1200/M for a 2 bedroom), i currently give my parents $600 per month in rent which i feel is a waste of money since it is about the same amount i would be paying for a mortgage in a better home.

My credit profile is as follows:

EXP: 625 EQ: 606 TU: 630

Average age of accounts: 6 months

Total Utilization: 12%

Positive Accounts:

Public Savings Bank: Open Never Late

American Express: Open Never Late

Capital One: Open Never Late

First Premier: Open Never Late

Negative Accounts:

Bank of America: 1 year old Paid Charge Off ($600)

Credit Protection Association: 2 year old Comcast Unpaid ($120)

Income and debt:

Income: 26K Per Year

Debt: No Debt or Payments

Loan amount i am looking for:

Loan Amount: 70K-90K

Down Payment i can give: 6K

What do you guys think?

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I would try to get your scores about 20 points up. Although there are lenders that go to 580, you want the best rate to start with. I would say if you get your scores above 620 across, it will be good.

[Anonymous]

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@Denny33142 wrote:

Total Utilization: 12%

Debt: No Debt or Payments

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I don't understand how you have 12% utilization, but no debt or any debt payments. If your cards are at 12% utilization, then wouldn't there be some amount that you would owe and have to repay each month? This will add to your DTI when it comes to calculating how much you can afford or be approved for.

[Denny33142]

It's 12% on 2,000 of available credit, meaning i only have $240 of total credit card debt (which i pay off in full every month), other than that i have no other debt, no student loans or car payments or anything of the sort.

[BGinVA]

I just closed a $200K refinance with Quicken with a 630 middle score, so I think you can likely get through a new purchase either where you are at or with just a few points to get your middle score up.  I'm not sure what Quicken's cutoff is, I just know my 630 was a walk in the park for the refinance and I got 4.25% which wasn't too bad considering my orginal first was 6.5% and my HELOC was 9.75%, I'm a happy camper.  You would likely have to pay that unpaid Comcast, so either go ahead and pay it before applying or be prepared.  While I agree with a previous poster that in FL in particular taxes and insurance can be a major part of your monthly payment, it is still based on the value of the home and your price range is pretty conservative.  I think if you have your 3.5% for down payment and closing costs, you are close enough to at least start talking to some lenders, knowing you might be able to get a couple of extra points if needed by lowering your utilization %.  A heads up, if you decide to try Quicken, they WILL require a pre-payment of about $500 that goes towards their out of pocket expenses such as credit check fee, and appraisal, but its all credited back at closing, but if you don't close you will likely loose it.  Another lender had suggested Wells Fargo to me and said they were writing at 620 for FHA, but when I called they wouldn't even talk to me, said 640 was the minimum. but YMMV.  Good luck!

[Booner72]

You can probably get your scores up if you PFD those two collections.

Also only let 1-9% of your limit report a balance.  This will give you some points, too.

The OP who was approved through Quicken was the only post I've read all this time that was a positive post.  The 500 up front is total b.s.

I agree to talk to a loan officer - I would recommend you go to a BROKER.  They have more options.  If one bank says no, then they can try someone else.  I used Academy Mortgage and they were wonderful throughout the entire process.  I'm not 100% sure they work in FL, but I think they do, so just go to their website to check it out.  There are also a coupla brokers that hang out here that you can PM.  i got an FHA thru Academy, financied by Fannie Mae, and it was then sold to Wells Fargo.  I got the loan by the skin of my teeth bc of my credit.  I know Wells NEVER would have approved me had I gone directly to them.  Have you looked into the USDA loans?  Sounds like your income would qualify.

GOOD LUCK to you.

[CS800]

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@Denny33142 wrote:

I have been repairing my credit for the past 6 months and while my profile has been improving it has been painfully slow, the reason why i want to buy a home is because rent here in Florida is very expensive ($1200/M for a 2 bedroom), i currently give my parents $600 per month in rent which i feel is a waste of money since it is about the same amount i would be paying for a mortgage in a better home.

My credit profile is as follows:

EXP: 625 EQ: 606 TU: 630

Average age of accounts: 6 months

Total Utilization: 12%

Positive Accounts:

Public Savings Bank: Open Never Late

American Express: Open Never Late

Capital One: Open Never Late

First Premier: Open Never Late

Negative Accounts:

Bank of America: 1 year old Paid Charge Off ($600)

Credit Protection Association: 2 year old Comcast Unpaid ($120)

Income and debt:

Income: 26K Per Year

Debt: No Debt or Payments

Loan amount i am looking for:

Loan Amount: 70K-90K

Down Payment i can give: 6K

What do you guys think?

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I noticed you have an unpaid CO. I suggest you pay it since it will be an issue.

If you can do a PFD and bring your scores at least in the 640 range, you will be golden

[boomhower]

DO NOT pay the unpaid bill until told to do so.  It may seem counterintuitive but it can do more harm than good.  It's not going to raise the score.  If they want it paid you will do so at closing.  Leave it be until then.