Financing in Racine>Question Details

Dest_unknown…, Home Buyer in Racine, WI

will i qualify for an FHA loan?

Asked by Dest_unknown23, Racine, WI Wed Sep 9, 2009

Id like to try and purchase a home in the semi-near future. Just wondering if I would be anywhere in meeting the requirements for an FHA loan. Id like to try and get a loan for about 70,000 or so. howeever my credit score is only 550 and I have 12,000 in debt which costs me $400/month to maintain. my current monthly income is $2,450. I dont have any late payment on any of my debt or anything like that. If i wouldnt qualify how much debt should i pay off before applying? as far as down payment goes Im sure I could get 4-5,000 from family for that.
hope ive got enough info here. I just dont want to go to a bank to apply for an FHA loan and feel like a fool since my debt/credit score is so bad. though Ive heard with an FHA loan it doesnt have to be that great.

Thanks

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Michael Humphreys’ answer
Now a days you need a 620 to do an FHA loan. Evertyhing seems like it works. You have enough income to qualify for that price and you will have the 3.5% downpayment that is needed. What you need to do is work on your credit score and you should be fine. Pay down any debt that is over 50% of the limit, make sure everything is paid on time and limit the number of times your credit is pulled. So find out why your credit is bad and fix it and you can buy yhe house of your dreams
0 votes Thank Flag Link Wed Sep 9, 2009
Hello Dest:

The best way to determine what you'll need to qualify for a loan in the near future is to talk with a qualified mortgage broker or lender in your area. The broker or lender will look at your overall debt, your income, your length of employment, past tax returns, assets and savings (bank accounts, savings, stocks, etc.) and your FICO score to help you plan to reduce your debt and increase your FICO score and stash money away to cover closing costs and a downpayment. Right now, the bad news is that FICO mid-score (the middle score between your highest FICO score and the lowest) must be at least 620 to qualify for FHA loan, and you must have at least 3.5 percent of the purchase price available for a downpayment plus about 10% more to cover closing costs. At $70,000, that would mean having savings of almost $10,000 to comfortably afford a new home.

Talk with a broker today, so that you can plan to purchase a home in the future.

Good luck!!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA
Co-Host "Naked Real Estate" on http://www.blogtalkradio.com
0 votes Thank Flag Link Wed Sep 9, 2009
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