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I'd like to purchase my first home. I want to apply for a loan, but do not want an inquiry on my credit report unless I know for sure I will qualify. My question is can I qualify for a loan in the range of $100,000-$115,000?

My credit score is 644 (equifax)/651 (TU)/unknown (experian), annual income is $24,500 with current employer for past 2 years. I have about $9,000 in my savings account. I know I can more than likely qualify for a loan, but does anyone know if I can qualify for a loan in the range I want above? Thank you for any replies.

Btw, credit report shows no late payments on my 3 credit cards for past 24 months....a few collections in the $50-$200 that are about 3-4 years old....and a tax lien that has been resolved as I have fixed that issue with IRS, just a numerical error which resulted in no change in taxes (still its on the report now).

eric1 · Posted: Wed Dec 16, 2009 10:57 am Post subject:

You can qualify with your credit score. However, the loan amount you want may be a bit high for you and all will depend upon how much your taxes are and what rate you can get.

Meanwhile, if you were my customer, brother or sister...I would advise you NOT so spend so much for a home considering your current financial situation. You would get an FHA loan and will have very little remaining in reserves. Then, you will want to put THINGS in the home. Where will that money come from? Credit cards? Dont forget about utilities and everything else that comes up.

What happens if you lose your job? You will make two payments before you are out of money.

gmakerley · Posted: Wed Dec 16, 2009 1:26 pm Post subject:

st, posting your query in two different forums is really counter-productive. eric has essentially given you the same answer as i just typed here: http://www.mortgagefit.com/credit/mtg-500score.html#139713

in addition, i note that eric is chastising you for even considering such a loan with your income. i didn't say as much, but i have to be in agreement with him, regardless of what relation we may or may not be.

you need to take extreme care in order not to become one of the ugly statistics we've seen in the last few years.

Guest

Sorry about the double post, just couldn't find the other post as I am new here. Thanks for the response qmakerley. Well, I have a house on my list and the list price is $110,000. The tax rate here is currently at 0.96%, about $1060 annually.

I felt the debt ratio above 35% was a bit high, which is why I wanted to put at least $9,000 down, and more if needed. My family can loan another $8,000 as a gift as I know I can repay them with the first time home tax credit as I do expect to receive the full credit.

I wanted to take extreme care in buying my first home, which is why I came on here first. I am currently renting and my rent has been $595/ month for the past 2 years. And the reason I asked is because my rent is already 30% of my monthly gross. I have talked to a loan officer and the officer suggested a 5 year ARM, which to me sounds like the "death" mortgage.

Again, thank you for your response and it is appreciated.

gmakerley · Posted: Wed Dec 16, 2009 9:04 pm Post subject:

i won't agree that a 5-year arm is a "death mortgage" - i have one and my rate went down this year...currently paying 4%. what it did for me 5+ years ago was allow me to feel better about my monthly mortgage obligation, with the expectation that i could always refinance if rates began to climb and were sticking, plus the thought that prices were also escalating (along with my taxes - ouch!). well prices went up and then back down, but i'm still whole, so that's a wonderful thing. but i digress...certainly a fixed rate is always a secure thing, so i wouldn't advise against it by all means, and it is the right choice for most rather than an arm.

by all means, see if you can get seller assistance rather than help from family that you'd have to use your tax credit to repay. and by no means are you to tell your lender that you'll repay whatever gift you get.

it's a very good thing that you are being proactive in this process and learning as much as you can...too many don't try, or even if and when they do try, they get stuck with one of those air-headed loan officers who has no clue or else the type who could care less as long as his pockets get filled. yes, i did say that!

i think the beauty of this site, frankly, is that we've got caring individuals who take the time to express their opinions, straighten out the incorrect posts and get to the meat of the matter. i'm grateful to be amongst some upstanding loan officers who realize it's not all about the money, but that helping someone achieve a goal is a worthy endeavor.

please don't hesitate to ask if you have other questions now or later.

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