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I am trying to figure out if I would qualify for a $ 275,000 loan and if not, I would like to find a ballpark figure for what I would anticipate being approved for in the state of Texas. I am 30 and married with 2 kids (wife is a homemaker), first time home buyer, have a very minimal amount to put down (under $ 10,000). My credit score at last check was around 650-675. My income after taxes is about $ 4,000/month, and pay $ 650 total each month in credit card bills and student loans ($ 400 which is mine, $ 250 is my wife’s and she probably wouldn’t be on the loan since she doesn’t have an income). I currently rent and pay $ 1700 (would prefer to keep my monthly mortgage + taxes and insurance under $ 1700). Thanks!

4 Thoughts on would i qualify for a $275,000 loan?
  1. Reply
    February 5, 2014 at 4:57 am

    Your credit score is only fair to good so you would not get the best interest rates.
    You and your wife should both be on the loan anyway, since the house will be in both of your names, wouldn’t it?
    Lenders usually want your mortgage obligation to equal no more than 28-31% of your monthly income before taxes, and not more than 41% when you include other liabilities.
    If you are bringing home $ 4000 is your monthly gross about $ 4800?
    28 -31 % of that is $ 1344 – $ 1488, and that would be your principal and interest as well as property taxes, insurance and PMI since you are not putting down 20%.
    If you add in your further obligations of $ 650 per month, you are just barely in range at about 45%
    You might get an FHA loan which would allow you to put just 3.5% down and on a $ 275K loan, that would be $ 9625. That doesn’t leave you anything for closing costs or other expenses, which can be about 3% of the selling price. Again at $ 275K closing costs could be $ 6000-8000.
    Strongly suggest you speak to a mortgage lender who can give you an idea of what you can qualify for.
    Also try to save more for a down payment and try to improve your credit score.
    Here is a website which can help you determine your monthly mortgage costs.

  2. Reply
    February 5, 2014 at 5:11 am

    Somewhere $ 150-180K is probably more realistic, and would likely keep your payment in the range you want. If a large part of that $ 650 per month is credit cards and not mostly student loans, get those paid down before you try to buy a home.

    Talk to your bank and they’ll tell you about how much you’d qualify for.

  3. Reply
    February 5, 2014 at 5:55 am

    No you will not qualify for the following reasons:
    The max loan that you could get is approx $ 140K (three times salary)
    Significant credit payments
    You need to save a lot more as a down payments and for emergencies
    Your score is not good. You could get an FHA loan but that is about it.

  4. Reply
    Janet P
    February 5, 2014 at 6:45 am

    You do not earn enough for that kind of mortgage, more like 120-140.

    But you would disqualify on the bad credit and high debt anyway.

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