What are our chances?

[mrsolson]

My husband and I are hoping to apply for a mortgage soon. Our credit scores are as follows

Me: TransUnion- 633; Equifax- 651

Hubby: TU- 648; Equifax- 628

Our credit reports look good. Our most recent late was 3 years ago. Hubby does have 2 collections on his account, we've tried disputing them but the company won't take them off. They are both paid and both from 2006.

We are looking for a loan in the $72,000(maximum) range. Our debt to income is roughly 32%.

I am self employed as a daycare provider and have been for the past 4 years.

This would be my first time buying a house and hubby's second, but the last time he bought was in 2005.

So what are our chances of getting a mortgage?

[mrsolson]

I forgot to mention, we have roughly $5,000 coming in from taxes that we'd like to use as our down payment.

[Gollum]

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@mrsolson wrote:

My husband and I are hoping to apply for a mortgage soon. Our credit scores are as follows

Me: TransUnion- 633; Equifax- 651

Hubby: TU- 648; Equifax- 628

Our credit reports look good. Our most recent late was 3 years ago. Hubby does have 2 collections on his account, we've tried disputing them but the company won't take them off. They are both paid and both from 2006.

We are looking for a loan in the $72,000(maximum) range. Our debt to income is roughly 32%.

I am self employed as a daycare provider and have been for the past 4 years.

This would be my first time buying a house and hubby's second, but the last time he bought was in 2005.

So what are our chances of getting a mortgage?

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If your DTI (Debt To Income) ratio is 32% *before* the mortgage, you will not qualify.

[StartingOver10]

When you are self-employed the lender will look at your income, but not your gross income (as opposed to W-2 type).

The last two years of your tax returns will be used to calculate the DTI. This is after your business expenses.

The issue many self-employed people face is this: they deduct so many expenses on their schedule C that there is not enough income to support any mortgage at all.

As to your current DTI, is that with your current housing payment or is that just your other debt not including housing?