My name is Jake Johnson and I work as a NY mortgage banker with one of the nations largest lenders. At this point in time, I don't know of any other company besides ours that is entertaining FHA loan purchases down to 531 credit scores. If you have proof of on time rent and 3.5% to put down on a property, we have a good chance of getting you a loan. You can email me at firstname.lastname@example.org if you have any questions.
the way to determine how much you can afford is to take 43% of your monthly income. for example, if you make 60k a year, your monthly income will be 5k. take 43% of 5k would be $2150 a month. your max mortgage would be 2150 a month. out of the 2150 you need to deduct your monthly debt and that would be roughly how much you can afford. don't forget that your monthly payment must include taxes, insurance and PMI (private mortgage insurance). also keep in mind that in the last few weeks i've had deals where we have gotten approvals past the 43%, as high as 53%, so you can purchase more of a house.
Carol is correct, you must have a in-depth review by a licensed mortgage person. Most are fully aware of the increased requirements for home buyers. Some Rochester properties qualify under farm programs, others can be purchased with FHA loans. FICO score of 620 or more are required to obtain an FHA or Rural Area mortgage loan without addional fees. We may soon see a 620 minimum to obtain these loan types.
Conventional loan rates with scores from 620 to 720 are charged higher fees. So your FICO credit score is a very important consideration!
Under Federal regulations, you are entitled to a free annual credit report. The FICO score will cost you. Go to " http://;www.annualcreditreport.com" and obtain your report. I've found that the TransUnion format was the easiest format to understand for a non-finance person.
IF YOU FIND THAT YOUR SCORE IS BELOW 620, OBTAIN CREDIT COUNSELING FROM YOUR LOCAL NOT-FOR-PROFIT HOUSING AGENCY OR READ A BOOK ON HOW TO IMPROVE YOUR CREDIT.
The quickest way to raise your score is to BECOME CURRENT ON ALL YOU BILLS , THEN PAY ALL YOUR BILLS AS SOON AS THEY COME IN, WELL BEFORE THEY ARE DUE. This requires a different mindset than what you have now. It is important to change your financial habits. As an example, stop using your credit cards; pay only with cash. If you don't have any cash after your bills are paid, you can't afford the purchase you are considering.
Please feel free to contact me with additional questions.
I am a mortgage broker. If I can be of service, please let me know!
877-238-6324 Ext 704