I am still in the early phases of trying to search for a house. I know that my husband and I will not be buying in the immediate future (definitely not before March, and possibly not until even later depending on how long our student loan consolidation takes as well as the length of time that it will take us to find a home in the very tight LA housing market.). I am very confused, however, as to how much of a mortgage we will be able to obtain, so I have no idea whether we can even afford a house that meets our needs right now. If not, then I need to stop thinking/ focusing on it or else I will be VERY disappointed.
My confusion stems from some conflicting information pertinent to our particular situation. For instance: 1) whether, as a married couple, my husband's pre-marriage student debts have to be included in the DTI if we do not include his income/credit score; 2) whether his credit score must be included in an FHA loan; 3) how my income will be calculated given that I have fewer than 2 years at my current job, but I entered this profession right after graduate school, and my current job pays substantially more than my initial position after graduate school.
I would like to get a pre-qualification just so that I can get a ballpark figure so that we know whether we will need to rehab his credit before applying, and what the appropriate debt and income calculations are for our situation. I had read that pre-qual does not involve pulling the credit scores, but I am having a hard time figuring out where to go in order to get that, as all the major banks that I have contacted say that a credit pull is necessary. (One said that it is a soft hit, but that doesn't ring true.)
How can I find out a ballpark lending figure given my particular circumstances without having my credit pulled?
1. You will have to include his debts against your income because you are in California.
2. You do not have to use his score, but if you also cannot count his income. But like I said above his debts getting counted against you.
A good way to figure out a ballpark figure is to take your monthly gross income and figure out what a 3rd of it equals.
So if you earn 10,000 a month gross, you can get a mortgage payment of 3300 a month. That includes taxes and insurance. Or you can take your yearly income and times it by 4. So if you earn 120k you can get around 480k mortgage.
But then you need to worry about your backend ratio, FHA maxes out at like 55 percent. So if you use the full 33 percent in the front you got 22 percent for the backend. This is for your student loans, credit card payments and the student loans.
So do your own math, and pull your scores here. If you score over 640 and the numbers work, then start looking for a broker.
Thanks for the response!
I figured out the back and front end ratios up to 41%. Using this calculator: (http://www.zillow.com/mortgage-calculator/) it seems like we can afford the types of homes we are looking at, but that assumes that they will count my entire income. Do you know if that is likely given my situation? (Graduated in 2011, worked in one year fellowship, then into permanent position for 5 months in same field at higher salary.)