FHA Approval and Closing

[Anonymous]

Hello everyone,

I found a townhome community that I'm really in love with and they are FHA approved (woohoo!!) I want to go ahead and apply for pre-approval in June because I plan on paying down my credit card balances next month.My current scores are TU 643, EQ 637and my gross income is around $3700 per month with a $330 per month car payment.

1). Before running my credit for pre-approval; does anyone have a rough idea of how much I may be approved for.

2). I have the following collections on my CR:

      LVNV Funding LLC (Old Sears a/c) $1715 due to fall off report 12/2011

      Fair Collections and Outsourcing (old apt) $1412 due to fall off report 02/2012

      Zenith Acquisition Corporation (old Total Visa a/c) $693 due to fall off report 05/2012

      Arrow Financial Services (Cortrust Bank cc) $712 due to fall off 03/2013

Would I have to pay off the collections that are falling off soon (LVNV & Fair Collections) before closing? I don't mind settling the other other since they are small amounts but I would rather have my money for emergencies than to pay for those large items that are falling off soon.

Your input would be greatly appreciated.

Thank you.

[Anonymous]

Just a rough idea, but probably about $1,100 to $1,200 in PITI. Included in this of course are any taxes and insurance on the home.  If you know those, we can more closely figure a loan amount for you.

As far as the collections, they do not necessarily need to be paid off. If the loanis approed through an automated underwriting system as is, nothing would need to bedoen. If it is not approved through the AUS, some lenders will require them to be paid off, and others allow a documented payment plan with the creditor to repay the collection. 

[Anonymous]

Thanks VAloanguy!

I'm in South Florida and the listings I'm looking at ranges from $120000 to $134900. I just looked and the property tax is showing $5000 to $5300 (yikes!!) . It's a newer community and the prices were in the $200K before the housing meltdown. I have $7500 for downpayment.

[Anonymous]

You are very welcome.

Even with those taxes, and the usually higher insurance rates for Florida, you should be fine for an FHA purchase.

[Anonymous]

Thank you.