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Credit Score in 34251 : Real Estate Advice

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Wed Mar 25, 2015
Mark R. Barrett answered:
For conventional loans you need 620 FICO then your total debt with house payment (DTI) compared to your average gross income over the past 2 years** needs to be under 45% and maybe lower to qualify. That’s 45% DTI. Calculating income correctly needs to be done by your loan officer though, that was just a general rule of thumb and only applies a small percent of time. For FHA loans if you have 500-579 FICO you need 10% down and a lot of other supporting documentation as why you deserve a loan amongst many other details. Max DTI would be 41% and rate as high as 4.25 and maybe even higher like 4.5% on extreme cases. 580-639 FICO your DTI needs to be fewer than 50% and in many cases under 43% if your file is not strong and the reason for the low FICO score not accepted as a good reason. For FHA loans over 640 FICO you can qualify with a house payment of 46.99% of your gross monthly income with a max of 56.99% with your total debt to include house payment. So the math is up to you now. Examples: 1,000 a month income. For 500-579 FICO your total debt to include house payment needs to be under $410 per month. For 580-639 FICO in varies and can be 43% to 50% and higher in some cases. So $430-$500 house payment. FHA loans over 640 FICO on $1,000 monthly payment your total debt can be $569 with a house payment no larger than $469. As a general rule of thumb for FHA count $7-7.25 per thousand in home price to get your total monthly payment PITI. i.e. 175,000 purchase prices payment with 620 FICO would be $1,268 give or take $20. Now you can do the math to see how much you might qualify for. Of course there is a lot more to qualifying and pricing loans but hopefully this gives you a rough idea to answer your question. You can always email or call me to clarify. Find a loan officer your real estate agent you work with likes or you got referred to. ... more
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