Which loan can I get? comment advice, Thx

[Anonymous]

Hi MyFICO family,

I have been working hard in re-building my Credit. I have payed a lot of money paying off debts so I don't have too much money on hand right now just around $24K, (for downpayment and CC).

My wife and I are planning to buy a house as our First-time home buyers.

House price targeted: $400,000

here is my current  picture:

Current Mortgage Scores: 734, 746, 757 (July 2019)

Income: 110K per year 

Monthly Expenses:

Car Payment: $409

student loan: $120

Alimony/child support: $ 1,700

total combined student loan balance: $5,000

Total car loan balance: $15,000 approx.

I know my CS & Alimony is too high but it is what it is now... 

just to mention that I'm using the AZERO method in which I'm using just one credit card with a UT% less than 10% each month.

 Any chance I will be able to get a conventional Loan? any advice, Will a FHA loan be a good option for us?

Thanks,

[Anonymous]

You can get a conventional. Wait a few months, reduce your utilization, and save a bit more for a 5% down payment and closing costs. Also, look to get seller concessions to help cover some of the costs. 

[CreditInspired]

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@Anonymous wrote:

Hi MyFICO family,

I have been working hard in re-building my Credit. I have payed a lot of money paying off debts so I don't have too much money on hand right now just around $24K, (for downpayment and CC).

My wife and I are planning to buy a house as our First-time home buyers.

House price targeted: $400,000

here is my current  picture:

Current Mortgage Scores: 734, 746, 757 (July 2019)

Income: 110K per year 

Monthly Expenses:

Car Payment: $409

student loan: $120

Alimony/child support: $ 1,700

total combined student loan balance: $5,000

Total car loan balance: $15,000 approx.

I know my CS & Alimony is too high but it is what it is now... 

just to mention that I'm using the AZERO method in which I'm using just one credit card with a UT% less than 10% each month.

 Any chance I will be able to get a conventional Loan? any advice, Will a FHA loan be a good option for us?

Thanks,

---

Hi OP,

That $1.7K alimony/child support hurts. I think a $400K home may be out of reach even with $20K down. I am providing a link to a calculator, which of course isn't 100% accurate (and it probably is using a very conservate backend/front-end ratio), but I think it will give you an idea and you can play with the numbers. I used $2.5K for property taxes and $1K for home owner's insurance (guesstimates). I also used $100 for CC debt. I put in 30-yr fixed., 3.8% interest.

https://www.bankrate.com/calculators/mortgages/new-house-calculator.aspx

It probably is a good idea to visit a LO for a prequal (no HP needed) to get a true idea of what price home you can afford. Does your wife have an income and will she be on the mortgage? If yes, this will help a lot. What is her middle score?

GL2U

[Anonymous]

You are in a good position for a mortgage, just not a 400k mortgage. Stated income and debt would put you in the 250 to 300k range.

[Anonymous]

Thank you all for your comments...

If I pay off both the car loan and Studdnt loans, will my situation change to reach the target house?

I'm living in CA and these are the price range in a descent and nice area around $400k

Thanks again for your comments

[Mortgage-Specialist]

I just looked over your info and can see that you would not qualify for conventional due to debt ratio, however you do in fact qualify for FHA. The question is, what county are you looking to live in ? Would need to see what the max allowable FHA  loan limit is in that county.  

[MauiMan85297]

If your anywhere in So Cali or far northen Cali then you would be fine in FHA as those limits are far above 400k, what county?

[Anonymous]

The FHA limit in the county we want is over 400k , so we are ok with that...

Just would like to know if I pay off both my car loan and student loan, my DTI would be approx. 47%... so would we be able to get a conv. Loan with 47% DTI?

[MauiMan85297]

Conv is 45 backend DTI

[CreditInspired]

And don’t forget 5% down + closing costs, which of course, ask for seller’s closing costs assistance up to 6% of sales price. If it’s a seller’s market, like it is here in VA, that’s not going to fly.