Mortgage approval odds with car loan and student loans

[Vic1]

 Hey everyone! I am interested in starting to look into buying a home. I tried back in January of 2020 and the mortgage lender sent me an email saying " yea this isn't going to work out" which IMO was unprofessional but oh well. I've paid down ALL of my credit card debt which was $7000 at time of last application process. Could I possibly get preapproved now with lees debt and monthly obligations? 

Ive been looking into trying to

do the FHA loan but I've seen that they don't do IDR plans for student loans ( if I can't be on the IDR plan my monthly payments are like $900). Is this true? 

Income: $53,000

student loans: $54,000

car loan: $12,000

cc debt $0

monthly obligation: car payment ($407), car insurance ($114/month), student loans ($244 when repayment begins again). 

 Current mortgage scores (TU/EQ/EX): 662/698/710 

Thanks!

[ShanetheMortgageMan]

With FHA & student loans if a payment is reporting to credit, that payment can be used to qualify.  If there is a payment listed on credit and it's more than the actual documented payment, then as long as you can document what the actual payment is then that actual payment can be used.  If there isn't a payment amount reported to credit (either blank or $0) then .5% of the balance will be used to qualify. 

You'll need to put your loans in repayment otherwise a payment of $270/mo will be applied (which is only $26/mo more than what your actual payment would be, but may be the difference depending on how much you are trying to qualify for).

You'll need to provide additional info to get more specific feedback.

[VALoanMaster]

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@Vic1 wrote:

 Hey everyone! I am interested in starting to look into buying a home. I tried back in January of 2020 and the mortgage lender sent me an email saying " yea this isn't going to work out" which IMO was unprofessional but oh well. I've paid down ALL of my credit card debt which was $7000 at time of last application process. Could I possibly get preapproved now with lees debt and monthly obligations? 

Ive been looking into trying to

do the FHA loan but I've seen that they don't do IDR plans for student loans ( if I can't be on the IDR plan my monthly payments are like $900). Is this true? 

Income: $53,000

student loans: $54,000

car loan: $12,000

cc debt $0

monthly obligation: car payment ($407), car insurance ($114/month), student loans ($244 when repayment begins again). 

 Current mortgage scores (TU/EQ/EX): 662/698/710 

Thanks!

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Hi @Vic1,

Here's a really simplified way to calculate what you might get approved for.

FHA will allow an back end debt ratio up to 56.9% as long as you get an automated underwriting system approval.

Your back end ratio is the percentage of your gross monthly income going to your debt and the proposed mortgage payment.

Here's how we calculate it.

$53,000/12 = $4,416.66 X 56.9% = $2,513 - $407 and $244 = $1,862.

That means you could have a max mortgage payment of $1,862.