Home Buying in 19050>Question Details

Angel, Home Buyer in Philadelphia, PA

Can I Purchase A House Having SSI Income?

Asked by Angel, Philadelphia, PA Tue Oct 8, 2013

I was interested in possible buying a home but was unsure if I could because of my permanent disability income ($730). I was thinking it would have to be through FHA. I recently had a pre-purchase counseling session and was told by the credit counselor that I could in fact purchase a house because of my credit score (724) but I would need to work on my back-end DTI. Also that I should go for a conventional loan because the monthly payments would be cheaper opposed to an FHA.

Now that all was great, or so I thought until I started calling lender from the PHFA site. The 3 lenders I spoke with told me that my income was too low for a mortgage. Now I'm confused and disappointed. I worked hard to get my credit score up. Was researching and came across, "Home Possible Mortgages" through Freddie Mac. I was wondering if I qualified for that program or any others someone may know of?

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Hello Angel,

Disability income is allowed. You will need to show that the income will continue for at least three years. A doctors note as to the permanency of the disability may be required.
The credit score is fine.
The problem is that at $730 per month the MAX mortgage you qualify for on a conventional loan would be $377 per month and that includes taxes and insurance. I am allowed to gross up your disability income by 115% because it is not taxable
If the taxes on the property are $1200 and the homeowners insurance is $600, that would mean your mortgage payment would have to be $227 per month. That is assuming you have no other debt.
Now FHA will allow for a slightly higher debt ratio but with the PMI you would actually qualify for less of a mortgage amount.
With 5% down at todays rates you would qualify for a loan amount of $55,000 approx assuming no other debt
It's really not a matter of other programs being available, it comes down to your debt to income ratio and how much house you can afford including taxes and insurance.

So if you have some money for down payment an closing costs, and you have no other debt and you can find a home for under $60,000 with taxes of less than $1200 per year, then maybe you can buy a home.

Please understand that I am talking in general terms here and you should speak with a loan officer who can assess your situation and offer all possible options.



Regards,
Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010 & 2012
NMLS ID 143960
0 votes Thank Flag Link Tue Oct 8, 2013
Angel,

Alan just gave you the best answer that anyone could ever ask for.

When lenders look at your qualifications, they factor in you having money to actually live your life. So, if you are only receiving income of less than $800/month REGARDLESS of the source, you will not be able to qualify for a very large loan because you will not have the monthly income to support the expenditure.

Kudos on improving your credit. Is there a secondary source of income in your household? Without it, I am afraid your options will be limited.

Joshua Stein, REALTOR®, e-Pro®
Coldwell Banker Preferred – Conshohocken

Office: (610) 828-9558 * Cell: (215) 866-8030
Direct: (484) 270-1165 * Fax: (215) 999-5894
Email: jstein@cbpref.com
Web: http://www.joshuasteinhomes.com
Blog: http://jsteinhomes.wordpress.com/
PA License #RS317975
0 votes Thank Flag Link Tue Oct 8, 2013
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