Can I get a Mortgage Loan ?

Deal Score0

My transunion credit score is 713. Whats hurting my score is the length of credit history (2 years and 3 months last checked two months ago) i make 500.00 a week approximately. I dont have money saved up for a down payment yet however I am trying. I want to buy a house because it is cheeper. I would rent out two rooms to friends and wouldnt pay anywhereed near the cost of the mortgage. Will a lender give me a loan with these qualifications?

5 Comments
  1. Reply
    Joseph Caltabanio
    April 30, 2011 at 12:54 am

    Your credit score is good enough to get you a loan. However, the lowest amount you can put down is 3.5% for an FHA loan or 3% for a conventional loan (though a limited amount of lenders will do this so it’s tricky). As for your income, a mortgage officer will have to run the numbers will you and let you know how much of a house you can afford when considering how much money you make.

    So, first step is start saving at least some money. I also always recommend contacting a loan officer to get “pre-approved” BEFORE you start the house searching process.

    Let me know if you have any other questions or I can help you in any other way.

  2. Reply
    LadyJane
    April 30, 2011 at 1:28 am

    That credit score is okay, but you want to make sure you have money saved up. Putting down less than 20% down payment will subject you to “mortgage insurance” which is basically like throwing money away and is an extra monthly cost.

    It’s hard to spend more renting when you know you can get a house for less… but make sure you are financially stable and secure before getting a house. Remember that a broken water heater can cost $ 800 and a broken heater can cost $ 3,000. You need to have money saved for those emergencies.

    Renting out rooms doesn’t always work out so be prepared to take the entire payment yourself first. Getting a rental roomie is just a bonus then. Keep saving and watching the housing market. Most places are still declining in value so houses will only be getting cheaper!

  3. Reply
    chatsplas
    April 30, 2011 at 2:24 am

    SAVE, save, save
    The more you put down, the better your chances of loan approval
    The more you put down, the LESS you pay over the life of the loan
    Need 3.5-5% down for FHA and 10-20% for conventional
    Putting down 20% avoids substantial extra costs of PMI
    BUILD, build your credit, every month

    Rule of Thumb: You can afford to spend 1/4 of income on housing, not more than 1/3 with all utilities thrown in. . . . . .or. . . . . .You can afford to buy a home costing 2 to 2.5 times annual income, not more than 3 times income.

  4. Reply
    Sue Stewart
    April 30, 2011 at 2:54 am

    Your credit score is ok. And you will be able to get a mortgage loan, but not with the best mortgage rate possible.

    It’s great you are trying to save up for a down payment because most lenders are now requiring an average of 27 percent down, according to the Mortgage Bankers Association of America. And even though you only have to put down 3.5%-5% for an FHA loan, they are raising fees to those with less cash to put down.

    So make sure you save as much money as possible, not just for a down payment. Save enough to cover three months of your household expenses and factor in closing costs which may add 3 to 5 percent of the cost of the house as well. Your financial situation should be as stable as possible before you apply for a mortgage loan.

    You also might want to get prequalified for a loan. Prequalification gives you a starting place, helping you sort out whether you can possibly get a mortgage loan. It is fast and easy to do. There is no point in going through the pre-approval process if you don’t have the income, assets or credit score to move forward. However if you can get prequalified for a loan, you should go through the pre-approval process next.

    In summation, your first steps to getting a mortgage should be to raise your credit score, a score of 720 or higher should be your goal, to save up for a down payment and other expenses, and to prequalify for a loan.

    To see if you can prequalify for a loan you can visit MortgageMatch.com and use the PreQual Plus feature (https://www.mortgagematch.com/prequalify/interview_your_property.aspx?redir=1)

  5. Reply
    Syd C
    April 30, 2011 at 3:52 am

    Hey Kim, they all have good advice. Your situation sounds familiar. About 2 yrs ago I decided to start saving my $ hard-core. I have always been a saver and casually had saved around $ 12,000 since I was 17. I also made 500 a week, maybe a little less at that time. I wanted to buy a house, so I got additional jobs. 500 a week was doing a little less than full time, min wage. So I worked as many more hrs I could there, worked another job every weekend night, and nannied on weekday mornings. I brought my income up to 800/week. I worked around 60 hrs/week average. I am putting myself through college and still had managed to save $ 35,000 by living frugally. It helps that my rent was 100/mo and my car was paid off! Anyway, the first thing I did was buy a little leather notebook, where I recorded EVERY single penny made, even found. And in a separate area I recorded EVERY penny spent. I wrote down even the most trivial things. I wrote what each transaction was for, and categorized my income by source and my expenses into things like gas, food, entertainment, general shopping, bills, gifts, etc. I did this for 6 months straight. It took so much discipline, I hated it at times. But it was well worth it! It made me VERY aware of my spending habits. I found myself not purchasing a bottle of water because I would have to write it down! haha. Anyway, it is a great tool. In Michigan, homes are super cheap in areas, and I found a great one for only $ 30,000. At 22, I now own my own home. It’s great. I wish you the best of luck!

    Leave a reply

    Register New Account
    Reset Password