Am I reaching for the sky with my low income?

[Anonymous]

I’m looking to move out and potentially becoming a first time home owner in the next year or two but I think my gross annual income of $43k might be holding me back especially since the cost here in California is very expensive. My current mortgage scores are in the low to mid 700’s with a 9% utilization on my credit cards. Have to find how to calculate my DTI but only major payment is a $250 boat loan. My budget for the land and a modular home would be roughly $200k. Any thoughts? I’ll need to read up on USDA/FHA/Convential and any assistance with down payment.

[Mortgage-Specialist]

If you credit card payments are super low it appears that your debt ratio would be good enough to do an FHA purchase (with lenders that have no FHA overlays) you make roughly 3,600 per month and guess-timatimg your tax and insurance, I'll over-round up your total new mortgage payment at 1,500. When adding the $250 boat payment would put you right around 50% debt ratio which is still okay. With your scores you're able to go up to 56.9% debt ratio(for FHA) so as long as your other credit report monthly debts are really low, you should be okay.

You'd have a more difficult time qualifying for conventional and even more difficult with USDA due to debt ratios. Many of the down payment assistance programs have debt ratio restrictions too.

As I am writing this to you right now I'm scratching my head thinking "How can I be giving this information to someone when I dont have enough information?" As you know, you should get a true analysis based on exact income/debts etc... But it sounds like you just wanted to know if you have a chance to buy. Based on the little info you provided, the answer is YES!

[NC_Mtg_Loaner]

Good Advice above from Mortgage-Specialist, but you certainly should discuss this with a local lender that knows your market.  

It's always the things we don't know about that cause us to deny loans once we learn of them and without gathering more details we can only say to keep moving forward--you aren't denied and you aren't pre-approved.   (Curious what property taxes and insurance costs are in your area as these unknown variables can have a big impact on your DTI)

[Anonymous]

Thank you for the responses.

Correct, I’m just getting my feet wet and thought I’d come on this board before getting into deeper waters to see what I need to keep in mind. I have about a year of credit history and that’s something I’m sure lenders look at as well. Just looking to prepare myself for the next year or two.

[Anonymous]

Could anyone give me any advice regarding purchasing land and a home. We’re looking outside the city since that’s what the wallet could only afford.