Would we be able to get approved for $125,000 home loan?
My husband & I are looking for our first home, and looking for a home to stay in for a very long time, so we aren't necessarily wanting the "starter home" look. The homes we are finding that we like and the note we figure up with our realtor are about the same as we pay for rent right now at our apartment...
My question is, if my husband makes $30,000 a year (I make strickly commission on my job, so I can't be figured in), one car note ($380/month) and no credit cards (all payed off) and he has excellent credit. I know it is impossible to know for sure without someone seeing all the info, but does anyone know our chances of being approved for a $125,000 home loan?? Thanks.
I'm new to all of this, so if anymore info is needed...I can provide it. We are going later this week to fill out all the paperwork, but I'm just curious whether to get my hopes up or not ;)
- 1 decade agoBest Answer
There are many options for home loans; however it is difficult to give you a direct answer without knowing where you live. Many states and communities can offer low income loan programs (for example here in Massachusetts we have Mass Housing). What you need to look at is your debt to income ratio. For example: If your husband makes $2500/month and your only debt is $380 that is pretty good at only about 15%.
The general rule is that your house debt should not be more then 28% of your income. If you include additional debt like credit cards or car loans your debt to income should not be more then 36%.
Some loans like FHA loans may fund a loan with a buyer that has more then 36% debt to income ratio; however these loans require a higher credit score and may charge a higher percentage rate then conventional loans.
Another benefit is that many FHA lenders are now allowing first time home buyers to use their $8000 first time homebuyers tax credit as a down payment or to cover closing costs rather then waiting until tax time to cash in on this money. I am not too sure where you are located but I suggest you check out the Federal Housing Administrations website for more information.
- Twitter BirdLv 51 decade ago
You would probably get a mortgage of 90K approved if your credit rating was over 740, but the car note is rather high for your income level. I think it will be a stretch to get even 100K approved.
Assuming you have 25K for down payment & you took a 125K mortgage, your monthly payment + escrow would be about $925/month. In addition to that you have to pay/save for regular repairs & maintenance. Are you really prepared for that high of a mortgage?
If you are after your dream home instead of a starter home, then the only way to do it is to save aggressively and have a larger down payment. Try living on just your husband's salary and put 100% of your commission income into savings.
- Anonymous4 years ago
With a credit score in the high 600's you should be able to get approved for a home loan without a co signer. You will probably not qualify for anywhere near the 500+K mark that you got with your dad...but being 23 I don't think you really need a home worth that much. I just bought my first home a couple of months ago. GOOD LUCK!!!! And get a rate lock...as rates are going to continue to move up in the coming months.
- shipwreckLv 71 decade ago
With that much non mortgage debt it will be hard to find anything. I was making about 34K when I was approved for 116,500 but I had no other debt and it was tight.
Normally loans are given up to 28% of your gross income or 32% including other debt. Your car payment is about 15% so it reduces the amount you qualify for.
If you pay off the car before you apply for the mortgage it might help more than a larger down payment.
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- rtfmLv 71 decade ago
You won't get approved for a loan that's any more than 3 times your annual income. That means you'd qualify for a mortgage of $90K. Unless you have $35K to put down, you wouldn't be able to afford a $125K home. Sorry.
Remember most lenders prefer a 20 percent down payment.
- Connie LLv 41 decade ago
Slim to none. You'll need to put down a larger down payment for a smaller loan amount (probably $90k).
- fakehuskieLv 51 decade ago
I think you have a good chance at getting a loan. Be sure to have 20% on any house, you are going after. Also have your pre-approvial squared away, before bidding on a house..
- 1 decade ago
Well he shouldn't have a hard time because of his good credit but his income is not that high and your income can't be tracked so hopefully they can put some strings for the both of you.
- PengyLv 71 decade ago
Sorry cannot afford it, and will not get approved way over your income
- LandlordLv 71 decade ago
If you are just using your hisbands pay the chances are ZERO, no chance at all, he does not make enough money.