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Hi MyFico,
I would like to start off by saying this is my first post, but I have been lurking on the website for about a year now and I must say that I love this website and all the knowledgeable contributors that are in this community. I will also do my best to post on threads that I feel I can make a reasonable contribution to.
Well I am curious as to if I qualify for an FHA loan, and how much I should expect to qualify for if so. After harvesting all the information on these boards, I have come up with my own calculation but I would love if other members gave me their .02. I recently dropped off income paperwork which is 2010 and 2011 Tax Returns, including schedule C, (I am 1099'd by my "employer"), 4 pay stubs and they ran my credit. They are supposed to get back me this Tuesday but I would just like some opinions
They ran my credit and the scores are as follows:
Experian -718 - Fair Isaac V2 Fico
TransUnion - 703 - Classic 04 Fico
Equifax - 693 - Beacon 5 Fico
For lurker purposes (those that are wondering what gave me my scores to guesstimate what theirs could look like), I have a few Credit accounts that report to my credit. They are as follows:
WF CC Limit of $3,400 (300 and change on balance now, but at time of pull was 1300)
Macy's Card no reported limit, no balance
Walmart (not the Discover) Limit of 1k, no balance
WF CC No balance, closed
I have no other open loans or revolving debt
I did the math and I believe at the time of pull, my AAoA (average age of accounts for new lurkers) was 1 Year and 2 months
I am 1099'd by my "employer" and in 2010 I deducted a lot of "business expenses: not knowing it would affect my chances (ie amount) of getting a loan, so my net income was low.
About 15k
2011 I netted 38k
and so far this year on track to make as much or more than 2011
Am I right to assume my averaged monthly income for the last two years will be used to determine what I qualify for? (which is about 2200)
Since I have no revolving debt (I will make sure I have none), I was told I can expect to be able to get 41% of my income towards my housing expense (2200 x .41) which gives me about 900 towards the PITI + hoa dues etc. Am I correct to think somewhere around the 120k mark as max? (I am searching around 110k mark by the way) I am 22 years old if that matters. I would love to hear some opinions or maybe even other people wondering the same thing for themselves.
Hi - I don't think they are going to average your income for the past two years - I believe they will average your current income from the past couple of paystubs as that is what they did with me for an FHA loan.
I don't have the answers to your other questions - primarily how much house you will qualify for - but there are calculators out on the internet that can help you with that.
I would encourage you to look into USDA rural loans as I'm certain your income would qualify.
Hopefully someone comes along soon to help you with your other concerns.
I do believe that your work expenses will be decucted from your annual income The bank prefers to see the money going into your pockets... not your contract/business.
Right, that is why I mentioned net. I already have that in mind (i deducted like 11k in expenses in 2010, so I netted 15k)
And then 2011 I had a much better year and I had no business expenses.
Booner72- Thanks for the reply, i guess I will know soon enough. I will update here.
For what it is worth, or if anyone cares, we closed on March 30th
I qualified for 140k, paid 120k for the house with 3.5% down and seller paid 4200 in closing.
I couldn't be happier! Thanks Myfico!
Congratulations!
Congratulations!!!!! I love to hear the closing stories!!! Enjoy your new home!
Congrats
@mvc wrote:For what it is worth, or if anyone cares, we closed on March 30th
I qualified for 140k, paid 120k for the house with 3.5% down and seller paid 4200 in closing.
I couldn't be happier! Thanks Myfico!
I care
Stories like these help DW and I stay motivated to pay down debts and keep on track for home ownership in 2013!!!
Congrats!
Congrats on your new purchased!!