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I bought my house with a lower credit score, FHA, about four years ago. My credit road has been bumpy but i have zero collections and the score is considered fair. We are selling this house to buy or build a bigger one. With the sale, I should have about 50k for a down payment. My question is on a 75k yearly salary, what kind of pre approval can be expected for a “fair” credit score and that down payment. I know it is not exact but, my first pre approval when I made less money was 180k. Now with the market being higher I want to know what I need to do to see around 300k pre approval. Id like to stick with FHA again
It's not just going to be your credit score. The amount of time you've been earning that salary counts. Your debt to income ratio counts.
Your take-home pay is, what, about $4500 per month?
A $300,000 loan at 3% for 30 years would run you about $1260 per month P+I. Add taxes and insurance, maybe push that to $1500. Looks easy but do you have any other debts. Car payments for two cars, maybe. Credit card balances. Utilities. Do you have kids. They cost money.
Total all that up and with $50,000 down might be able to overcome a "fair" score.
Best way to find out is talk to a mortgage broker or bank.
Thats kinda what I figured, Same job only more money over the years, three kiddos one car payment, and a credit card. Thats all for debt. My current house loan is 1500 a month at a 15 year fixed. Id hate to see a low pre approval because this market is so high right now, and if I wait to sell, I am afraid I will lose profit if it drops. My plan is to sell now, rent temporarily until we build.
More important is the question after you are approved: “Can I really afford this payment?” In every mortgage I’ve ever been approved for, I was not comfortable with what that payment would have been, and borrowed considerably less on a less expensive home.
Thats kinda what I figured, Same job only more money over the years, three kiddos one car payment, and a credit card. Thats all for debt. My current house loan is 1500 a month at a 15 year fixed. Id hate to see a low pre approval because this market is so high right now, and if I wait to sell, I am afraid I will lose profit if it drops. My plan is to sell now, rent temporarily until we build.
Op, what state are you in? And what kind of credit score you mean by “fair”?
From what I was always told, your credit score really only matters for mortgage rate. How much you're approved for really boils down to income and debt-to-income ratio. But I'm not a mortgage broker and could be misinformed.
OP~ Instead of selling your place now, how about you rent it out? Would it rent for more than your payment? Having more income always looks good on a loan app.
Op, what state are you in? And what kind of credit score you mean by “fair”?
In some states, going by state isn’t even going to help. I am in IL and depending on where you live, you can pay between $6K to $12K in taxes for a $300K home. There was one area I really liked, but there was just no way to afford anything there that I wanted with the tax rate. In this area, you are approved very locally, since you might be able to afford an $1800 payment, but not a $2300 payment you’d be making a few towns over.
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