Msusa07, Home Buyer in Farmington Hills, MI

What determines your loans amount more. Credit score or annual income.

Asked by Msusa07, Farmington Hills, MI Thu Oct 27, 2011

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Lenders are concerned about your willingness and ability to repay. They look at your credit score to determine your willingness, your debt-to-income to determine your ability. Lenders consider your discharged date as the end of your bankruptcy, so you have at least two years before you might qualify for an FHA loan. During the next couple of years you need to re-establish good credit. Keep in mind that no credit is not the same thing as good credit. FHA will want to see at least 3 lines of credit, paid on time, for at least a year AND a good credit score. FHA would consider rent and utility payments as credit references. If you don't already, make sure you make all payments by check so you can document these payments, no cash payments. Get a couple of small credit cards, pay them on time, use them once or twice a month, and keep small balances.
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1 vote Thank Flag Link Thu Oct 27, 2011
Hi, Both are key factors but income is what they use to determine what you can afford. They will determine what your debt-to-income ratios are. The credit score is what they use to determine how much of a risk you are. Remember the banks are investing in your ability to repay a loan.

Chris
1 vote Thank Flag Link Thu Oct 27, 2011
The annual income determines the amount of loan you can get. The credit score determines if you qualify for a mortgage.

Thanks,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
0 votes Thank Flag Link Thu Oct 27, 2011
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