Home Buying in Deptford>Question Details

Deptfordbaby, Home Buyer in Deptford, NJ

What kind of debt can I have on my credit in order to qualify for a FHA loan?

Asked by Deptfordbaby, Deptford, NJ Wed Aug 10, 2011

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I would contact a few different lenders in your area because each one will typically have completely different programs and qualifying guidelines.
0 votes Thank Flag Link Thu Aug 11, 2011
When you say "what kind" I assume you mean "how much" because obviously you need good credit and not bad credit. So here's how the numbers work to qualify for an FHA loan. You qualify for the LOWER of 29% of your gross monthly income OR 41% of your gross less your monthly recurring debt payments. Both qualifying ratios can be stretched if you have really good credit.

So, if your debt is more than 12% (41% - 29%) of your gross monthly income, the amount OVER 12% will reduce what you qualify for dollar for dollar. If you have a lot of debt, you qualify for less.

Getting prequalified is a great first step.... see here... http://hometeamnj.com/first-time-home-buyers-start-here/

A good agent can help with the preliminary questions like this and then refer you to a good lender when needed. An inexperienced or bad agent doesn't know anything about how to qualify for a mortgage.... pick your agent wisely, they'll be giving you advice and guidance thru the whole process.

I hope that's helpful... if so, click the "thumbs up" below

Joe
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0 votes Thank Flag Link Thu Aug 11, 2011
I have closed people with debt on their credit report..you dont want bad debt thats the key ...and of course your debt to income ratio needs to be in check...most people have car payments ect... its normal .. you dont wan to go on a spending spree before you apply for an fha loan or before you are about to get a commitment from a lender...we have a few good ones if you need more advice...FHA 3.5 % down great deal....John Bancey Realtor, (908)-577-8184 http://www.kenilworthnjrealestate.com
0 votes Thank Flag Link Wed Aug 10, 2011
You can have any type of debt on your credit report just as long as you are paying it on time.
0 votes Thank Flag Link Wed Aug 10, 2011
Hello,

Best thing for you to do is talk to a good mortgage company. They can help you and see exactly what program would be best for you and see what you qualify for.

If you would like some suggestions, feel free to email me!

Good Luck!
Gina Fagnani
GinaFagnani@aol.com
0 votes Thank Flag Link Wed Aug 10, 2011
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