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My finance are just starting the process of home ownership. Our combined income is 76000$ . She is back in school for nursing so our income will be more. Both our credit scores are 720ish. We have no debt besides a 250$ month car payment and a 50$ month student loan. Only have 5000$ saved. How much in your opinion would we prequalify for? Thanks

5 Thoughts on how much of a home loan would we qualify for in your oponion?
  1. Reply
    February 6, 2014 at 1:11 am

    Around $ 210,000.00…based on your current income.

    $ 5000 is about enough to pay the closing costs. You are still going to need a downpayment.

  2. Reply
    dog ma
    February 6, 2014 at 1:53 am

    Our opinion really does not matter. Go talk to a respected local lender and find out.
    But with that kind of income, you really should have more than $ 5000 in savings toward a home; that won’t even cover your closing costs in many cases. Congratulations on your great credit!

  3. Reply
    February 6, 2014 at 2:48 am

    General rule of thumb is 2-1/2 to 3 times your annual income. You will need a lot more than $ 5K to cover the downpayment and closing costs.

    By the way, it is a really bad idea to jointly purchase a house with someone you are not legally married to. If things go wrong, that house becomes a nightmare. Either wait till you are married to jointly buy the house or one of you buy the house based on your credit and income alone.

  4. Reply
    Pascal the Gambler
    February 6, 2014 at 3:30 am

    3x what you make now, or about 225K is what you can borrow. Her future earning potential is not considered.

  5. Reply
    February 6, 2014 at 3:33 am

    Our laws are set up for married couples when it come to real estate. You might consider making some type of agreement as to who would get the house,pay the monthly mortgage payments in the event your relationship does not go as you plan. Otherwise you are forming a partnership or corporation with no rules or a way to dissolve the partnership. Once married this agreement would be null and

    In order to establish what is called a ratio your mortgage underwriter would take into consideration all the debts listed on both your credit reports. The underwriter would then take the amount of income based on your pay stubs and the federal income taxes you filed for the past 2 years to determine the amount of money you earn to pay these debts. These two figures using a formula would determine your debt ratio.

    Your debt ratio should not be higher than 39%,of course lower is better. Based on this debt ratio you would be informed the amount of money your mortgage lender would lend to you to purchase a house.

    There are many online mortgage calculators that is available to you. You may enter numbers that would place you in the ball park of what your debt ratio would be.

    You would be asked to place your income, all debts you are required to pay that are listed on your credit report.

    Entering the figures and numbers would default to the debt ratio giving you some idea of what yours would be.

    In some instances you might be able to save this information and move the numbers around as you would please so as to see different scenarios.

    You should google mortgage calculator, several sites would appear. Select the one you would want to use. There is normally no cost to you for the use of these calculators.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

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