I'm just about ready to start talking with a bank to get approved for a mortgage & wanted some opinions/advice. I want to spend around $180,000 to get what I want but also willing to go to $200,000. My fico score is 715 (EQ) Monthly debt totals of $155 (student loan) Salary of $54,000 Been at current job 8 months $20,000 for down payment + $6,000 set aside for closing costs I was wondering if getting a loan of $180,000-$200,000 is probable for me? Also, do you recommend talking with a bank or a mortgage broker?
Rontg, The only thing that could possibly give you a little hiccup could be your employment history. You need a two year history in the same line of work. Have you been working in the same line of work for two years? You can change companies or locations as long as you are doing the same for two years. Otherwise, everything else about your situation seems perfect. Thanks! Heather with BoostMyScore.NET
Yup, I've been in web design since mid 2008. I was an intern, didn't make much then compared to now. Since then I graduated and have stayed in the same line of work. Thanks for your input.
I would start out by talking both directly with some local banks and a few mortgage brokers. They'll want to pull your credit scores up front, but don't let them. Try to get as much information out of them as possible before deciding who you want to work with. Then you can let them pull your FICO scores when you're ready to begin the actual underwriting process. I also wouldn't recommend making a purchase with less than 20% down. The real estate market is still quite volatile, and you could end up underwater relatively quick with only 10% or so to put down. Of course, that doesn't mean you might be able to find a lender willing to do the loan for less than 20% down. Are you planning on doing an FHA loan? As far as your debt-to-income ratio goes, you look pretty good. As a rule of thumb, you want your mortgage payment to be 30% or less of your gross monthly income. You should be well under that based upon the info. you've provided here. You have very little other recurring debt payments too, which is great.
If I was able to get a conventional loan with less than 20% what would be the benefit of doing FHA instead? With FHA isn't mortgage insurance required for the life of the loan, vs conventional where I can have it removed when I hit 20% eventually?
The general rule of thumb is that you only go the FHA route if you can't qualify for a conventional mortgage, but I'm sure there are certain situations when an FHA loan might be cheaper. You just have to run the numbers. Regardless, I still don't think it's a good idea to get yourself into a home loan in this market without at least 20% down. If you have that saved up, then you can go the conventional route and not even worry about PMI.
You're welcome! Feel free to come back with any questions you have as you go through the process. Happy to help.
