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Will I qualify for FHA?

Valued Member

Will I qualify for FHA?

  1. Mortgage Credit Scores:

TU642  EX: 641 EQ595


  1. Credit Negatives:If you have any, what negatives are on your credit reports. For each negative, please provide:

Late payments over a year ago for capital one

1 Collection account for an apartment complex that I didn’t paint walls back $600

Discharged Chapter 7 BK 2012


  1. Gross Income

Mine: $36,000

 

  1. Source of income.  

Employment Hourly $17.31


  1. Monthly debt payments

Car payment: $390.00

Student Loan: Currently deferred until December and then will be on IBR at $0 and another on IBR at $16

Credit card Credit one Limit $700 Balance is $245 ( Will pay off in the next month ) MIN PAYMENT $25

Capital one Limit $800 Balance $600 ( Will pay off in the next month ) MIN PAYMENT $25

Capital one Limit $550 Balance  $190  ( Will pay off in the next month ) MIN PAYMENT $25

Finger hut  Limit $500 Balance $94 MIN PAYMENT $15

Personal loan $1500 Monthly payments $170

 

Student loan balance $35,000 Car balance $7800
6. Employment (for those who are employed). 

  • Type of employment: W-2
  • How longMe: 1 Year
  • How longhave you been in the industry/career field. Me: 3 Years
  1. Assets/Reserves. This is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).
  • Savings: $500
  • Checking: $500
  • 401k: 0
  1. Location:This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.
    Indianapolis, Indiana

 

  1. Property Description:
  • Single family home, new construction
  1. Property Value
  • Purchase transaction: $165,000 ( Not sure if that’s too high because of my DTI)
  1. Occupancy
  • Primary residence
    • How many people living there, incomes even if not applicant, elderly, disabled. 3
    • Are all mortgage applicants going to be living in the house? yes
  1. Transaction Type.
  • Purchase

 

 

13 REPLIES
Established Contributor

Re: Will I qualify for FHA?

Student loan will be calculated at 1% for almost all discount downpayment type of loans such as FHA and USDA if the loan is in IBR. That would add 350.00 a month to your DTI.

FHA debt to income limits are 31% for housing and 43% total but lenders may have overlays which make those limits less.
That gives you a total debt limit of $1254.00 including your mortgage. Our mortgage is USDA closed 7/28 with 4% at 164,000 our taxes and insurance are 1000 and 1250 and our total payment is $1034.00.

I do not think your income will meet the ratios at this point but talk to a lender or maybe one will chime in.
Message 2 of 14
Established Contributor

Re: Will I qualify for FHA?

Also need 3.5% or more down (depends on credit score) and closing costs of approx. 3-5% (can be negotiated with seller in some markets)
Message 3 of 14
Valued Member

Re: Will I qualify for FHA?

I thank you for your feedback Smiley Happy

i spoke with a loan officer that said I could get approved for 140-150k with my income and debt 

Message 4 of 14
Moderator

Re: Will I qualify for FHA?


Firemediii wrote:
Student loan will be calculated at 1% for almost all discount downpayment type of loans such as FHA and USDA if the loan is in IBR. That would add 350.00 a month to your DTI.

FHA debt to income limits are 31% for housing and 43% total but lenders may have overlays which make those limits less.
That gives you a total debt limit of $1254.00 including your mortgage. Our mortgage is USDA closed 7/28 with 4% at 164,000 our taxes and insurance are 1000 and 1250 and our total payment is $1034.00.

I do not think your income will meet the ratios at this point but talk to a lender or maybe one will chime in.

^^^the portion highlighted in red is not accurate.  FHA has their guidelines: 46.99% max for front end (a/k/a housing) ratio and 56.99% for back-end (a/k/a total debt) ratio.  Each lender can set their own guidelines - make the ratios tighter, but not make the ratios more loose. Firemediii you must have had a very hard lender to make the FHA ratios so low. Is it possible they quoted you the ratios for a conventional loan? Because that is where the conventional loan ratios seem to be 43% to 45% for total.  

Message 5 of 14
Established Contributor

Re: Will I qualify for FHA?

Came from the FHA lender handbook.
Message 6 of 14
Moderator

Re: Will I qualify for FHA?


Firemediii wrote:
Came from the FHA lender handbook.

Honestly, I have several lenders that use higher ratios all day long.  Recent closings. Routinely see backend ratios in the 50% to 55% range all the time. 

Message 7 of 14
Established Contributor

Re: Will I qualify for FHA?

Was the 2015 lender guidelines apparently. Fascinating that the government is so loose with FHA but so tight with USDA. Anyways hope it all works out for the OP.

Message 8 of 14
Established Contributor

Re: Will I qualify for FHA?

Our loan this time was USDA and 29/41 were the loan limits. 

Message 9 of 14
Moderator

Re: Will I qualify for FHA?


Firemediii wrote:

Was the 2015 lender guidelines apparently. Fascinating that the government is so loose with FHA but so tight with USDA. Anyways hope it all works out for the OP.


Yes, isn't that the truth!  

 

We don't even have USDA available in my county at all. Have to go up to the next county to buy Smiley Happy

Message 10 of 14