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Can I qualify for a Mortgage (USDA/FHA)?


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9 replies to this topic

#1 bill875

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Posted 21 February 2012 - 06:19 PM

I'm interested in purchasing a single family house: 3BR/1.5+Bath and I'd be a first time home buyer. Here are the details of my income...

I live in North Carolina, make $60,500/yr Gross and have been with the same employer for 16 years.

My current Car Loan/Credit Card payments are:
Car Payment: $495.16/mo. Will be PIF 1/2014.
Credit Cards: $822/mo. (All min. payments combined).

I have a 401k valued at ~$41,000.

FICO Scores: TU:693 - EQ:659 as of 2/21/2011 (myfico.com).

I would have very little money to put in toward a down payment, so a USDA loan is the most attractive.

Thank you for any information and guidance you can provide. I've been lurking around for a few days and I'm new to this. If there is any additional information needed, please let me know and I'll reply ASAP.

Edited by bill875, 21 February 2012 - 06:20 PM.




#2 by2

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Posted 21 February 2012 - 06:48 PM

OK, so looks like you pay a lot for CC $800 a month??? I would get those lower it will help! Also you stated that you would have very little money to put in toward a down payment, but what about saving in case of life's unexpected things that happen! Please make sure you have monies for after you get those keys!!!!

Best of luck to ya!!

Edited by by2, 21 February 2012 - 06:48 PM.


#3 luckydriver

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Posted 21 February 2012 - 07:03 PM

DTI etc doesnt really matter for a mortgage but of course your scores are a function of that. i dont know anything about usda but FHA is all the same rate if you are 680 or 780 score

#4 Brian B The Loan Professor

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Posted 21 February 2012 - 07:13 PM

Off the top of my head - assuming your scores are sufficient to qualify
USDA is pretty tough on debt ratios so
You make roughly 5000 a month gross
Have $1325 in debt going out that would leave you roughly 1150 a month for mortgage - that is Principal Interest and Taxes - If you are in an area with average tax rates and no reason for high insurance then you would be looking at a mortgage around $140-$150 k a month - You didnt say how much homes were in your area
Now if you are in a Great State Like Texas where the Taxes are through the roof as is the insurance because of hurricanes etc you may have to lower that amount by a bit -


Hope this helps
Brian

#5 bill875

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Posted 21 February 2012 - 08:53 PM

Thanks for the advice everyone. Yes, I have a significant amount of CC debt that is mostly on a low-ish interest rate on my Patelco CU Visa card. I know it would be best to wait two more years, but I am just throwing away money by paying rent. With my Apt. Lease renewal coming up in a few months, I'm guessing they will be increasing my rent at least $30-$50/mo. due to the foreclosure situation and all of those folks now renting and unit availability is low.

Brian B... $140-$150 k a month? Or did you mean a $140-150k mortgage? Also, I made a mistake on my FICO score date, I pulled my scores today, not in 2011. Ooops! So if my middle score is 659, would I possibly qualify? EX is always my lowest. Big jerks they are :(

I'm between Charlotte and Asheville in ZIP 28602 (Hickory, NC - Catawba County) and homes are pretty affordable around here. I'm finding some nice homes within a 10 mi. radius that fit my needs in the $110-130k range. Insurance runs my co-workers anywhere between $600 and $750/year and hurricane risk is very minimal here. The tax rate is right around 1% depending on the area. I'd really love to find a foreclosure for 95k or less, but I don't know the best way to go about that. I would guess that contacting Wells Fargo or some other bank for Pre-approval is my first step to see where I truly stand. Agree/disagree?

Thanks again for your assistance :)

Edited by bill875, 21 February 2012 - 09:02 PM.


#6 Brian B The Loan Professor

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Posted 21 February 2012 - 09:01 PM

typo = that range for a mortgage
if you can find something for less you should be ok
B

#7 bill875

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Posted 21 February 2012 - 09:07 PM

Excellent Brian, thanks for the quick reply.

Edited by bill875, 21 February 2012 - 09:10 PM.


#8 Brian B The Loan Professor

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Posted 22 February 2012 - 01:30 AM

Excellent Brian, thanks for the quick reply.

Welcome always glad to help.
Good Luck
B

#9 bill875

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Posted 23 February 2012 - 09:01 PM

Good evening Brian,

I spoke on the telephon with someone local at Wells Fargo Home Mortgage. She ran some numbers for me and said that I would likely qualify for a $120,000 FHA loan at an interest rate of 3.75%. She estimated a monthly payment of around $795/mo. - factoring ins. & taxes on the high side to be safe. This would put me right at 41% DTI (Mortgage/CC/Car payments combined).

I have an appointment with her tomorrow to submit for Pre-Approval, but I'm getting cold feet because she said I made too much money to qualify for a USDA loan which seems wrong. I asked her if she was sure because I looked up the USDA Guaranteed income limits (http://www.rurdev.us...ents/NC GRH.pdf - 2nd page down toward the bottom) for Hickory, NC and it shows $74,750. As said before, I currently make just over $60,500. It would really help to NOT have to come up with a down payment and USDA Guaranteed is the route I'd like to go. I'm worried that they don't have my best interests in mind. Would I be better off working with another lender or perhaps a mortgage broker or perhaps yourself?

Thanks again for your assistance.

#10 Brian B The Loan Professor

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Posted 23 February 2012 - 09:13 PM

Good evening Brian,

I spoke on the telephon with someone local at Wells Fargo Home Mortgage. She ran some numbers for me and said that I would likely qualify for a $120,000 FHA loan at an interest rate of 3.75%. She estimated a monthly payment of around $795/mo. - factoring ins. & taxes on the high side to be safe. This would put me right at 41% DTI (Mortgage/CC/Car payments combined).

I have an appointment with her tomorrow to submit for Pre-Approval, but I'm getting cold feet because she said I made too much money to qualify for a USDA loan which seems wrong. I asked her if she was sure because I looked up the USDA Guaranteed income limits (http://www.rurdev.us...ents/NC GRH.pdf - 2nd page down toward the bottom) for Hickory, NC and it shows $74,750. As said before, I currently make just over $60,500. It would really help to NOT have to come up with a down payment and USDA Guaranteed is the route I'd like to go. I'm worried that they don't have my best interests in mind. Would I be better off working with another lender or perhaps a mortgage broker or perhaps yourself?

Thanks again for your assistance.

I have no idea on why they would say that? Maybe they dont have the program or possible are instructed to push FHA? Either way that would throw up a red flag.
B




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