I made 70 thousand plus this year have no debt have an income property i have no downpayment credit score of 640

Asked by cher2871_5, Tampa, FL Wed Mar 20, 2013

can i purchase a home and in what price range should i be looking

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Lisa Reeves’ answer
Lisa Reeves, Agent, Tampa, FL
Wed Mar 20, 2013
Depending on how long you have had your income and what type of income it is will determine if a lender considers all of it. If some of your income is based on your income property - you will have to show a two year rental history on your tax return. The biggest problem is that you have no down payment. Unless you are purchasing in a rural area or are a previous veteran you will need a minimum of 3.5%-5% of the purchase price plus any closing costs that you can't get as seller concessions. So total down payment and closing costs would be around 6-8%

Based upon your income and using a general number of 31% towards your housing debt ratio - you could afford about 1800 a month in a house payment. As a rough estimate - $250K home. However you will want 15K-20K in the bank to start this process. You can use other sources besides savings to help with your down payment. Contact me if I can answer any other questions.
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, ,
Wed Mar 20, 2013
Hi Cher

Lenders look primarily at 3 things when approving you for a mortgage: Income, Credit, and Down Payment.

Income - not only the amount you make but how long you have been at it. Consistency is important. Over 2 years at your current job will help

Credit - Your scores can help determine what interest rate you get, but more importantly lenders look at your credit profile/payment history to determine if you are a good credit risk. A 640 credit score should be workable, but that is towards the low end and you would do yourself a service if you got those scores up before you bought.

Down payment - FHA permits you to finance a home with as little as 3.5% down. VA (if you are a qualified veteran) offers no down payment. 0% down conventional is basically a thing of the past, and even when they were available they required good credit scores.

Your challenges here are the low credit score and lack of down payment. Not to say it can't be done, but in my opinion you would be best off saving up some money and working on your credit before making the move. It will make the process much easier for you and you can get a better interest rate. You appear to have a good income, so you should be able to save up $5000-$10000 pretty quickly if you have no debts.

I preach "sustained homeownership", meaning just because someone is willing to give you a loan doesnt necessarily mean you should do it. You should make sure your finances are in good order and that you can fit the new payment within your budget comfortable. I want to set you up to succeed and not be paycheck to paycheck.

That's just one humble loan officer's opinion. Best of luck, and if I can be of any assistance please feel free to reach out!

0 votes
Tracy Hoyt, Agent, Valrico, FL
Wed Mar 20, 2013
Yes. You can find properties that fit in your budget. I would be happy to help you find a home in Tampa. I work with many first time home buyers.

Please review my profile on Trulia and send me a message.

Tracy Hoyt
Prudential Tropical Realty
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