Will I qualify for a FHA Loan?

[homebuyer1]

I am a first time buyer, and currently my EQ sore is 651, EX score is 654, and my TU score is 649. I have a yearly salary of $38,995. Currently pay $247.00 in student loans.I have a capital one card with a limit of $750.00 and a balance of $40.00. Would I qualify for a FHA Loan? If I qualify where would I go to apply for the loan (bank, loan office, or what.... I am clueless about this part) and how much would I qualify for? I will not apply until my score reach a 680-700. I am looking at a house that is priced for $140,000, would I be able to afford it?

[DallasLoanGuy]

---

@homebuyer1 wrote:
I am a first time buyer, and currently my EQ sore is 651, EX score is 654, and my TU score is 649. I have a yearly salary of $38,995. Currently pay $247.00 in student loans.I have a capital one card with a limit of $750.00 and a balance of $40.00. Would I qualify for a FHA Loan? If I qualify where would I go to apply for the loan (bank, loan office, or what. talk to friends and family or coworkers to get referred to a good loan officer. realtors know the good ones too... I am clueless about this part) and how much would I qualify for? I will not apply until my score reach a 680-700. I am looking at a house that is priced for $140,000, would I be able to afford it? probably. is the sl and one cc all of the debt payments?

---

[VirtualCuriosity]

I think the better question is, am I ready to qualify for a loan?  But, that is for you to decide.  There are some different opinions that you can "afford" 2.5 times your yearly salary. In that case, you would be closer to the 97k'ish range.  Some say never spend more than 28% of your gross monthly income on your mortgage, insurance, and taxes combined.  Some say never spend more than 25% of your monthly take home pay.  

Obviously, paying cash for a house is the best way to buy, but realistically, most people are not able to be that passionate and dedicated to save for it.  If not paying with cash, a good method is to put at least 20% to put down, with only a 15 year mortgage loan, and still having 3-6 months of an emergency fund set aside (all without having any debt, including dreaded student loans).  Otherwise, you're asking for trouble later.

In closing, here is a good idea IMHO.  You didn't mention your current living arrangments.  Make a written budget as if you were already in the "new house" with the estimated payment, taxes, insurance, utilities, food, fun, etc. and imagine that for 15 years, or longer if you choose.  Bank all of the money from your budget that you are not currently using.  That way, worse case scenerio, you will have a lump sum of cash when your credit improves.  Whatever your decision is, remember that real estate brokers, mortgage loan officers, banks all make money off of what you buy.  So, do plenty of research and consideration before your even start.  Try not to look at houses (like you apparently may have) until you know for sure your ready.  That will save the common fever that ends up hurting people later.  Good luck in whatever you choose to do.

[foofighter74]

---

VirtualCuriosity wrote: a good method is to put at least 20% to put down, with only a 15 year mortgage loan, and still having 3-6 months of an emergency fund set aside (all without having any debt, including dreaded student loans).  .

---

Very few people would buy a house if they had to live up to this standard. 

I would love to pay cash for my house, and I will certainly be encouraging my children to try and be able to do that when it comes time for them to try and do so...but we also need to be realistic.  The median income in the US is just over $50,000 per household.  And we must remember that most people in the market to buy a house, especially first time buyers, have not reached their max earning potential. 

It would be great to be able to pay cash for a house, and cars, as well as finance your children's education out of pocket...but it's not realistic for most people. 

[JM-AM]

But paying it off sooner is realistic especially with todays rates.

Not saying you have to pay it off in 5 years but it is really obtainable to pay off in 15 years.

[foofighter74]

Assuming that a person's income rises, and they don't accumulate additional debt to offset that rise in income, I certainly think it's realistic.

[MovingForward_2012]

It depends on the purchase price as well.