Mortgage Approval Doable?
Do you guys think today its possible (FHA included) to get approved for a mortgage– home listed at $550k (2-family) rent for apartment will bring in approx $1,500 a month. Currently with a little under $30k in cash. $125k yearly income, pretty secure job (utilities, IT smart meters field). No credit card debt. Monthly student…
Do you guys think today its possible (FHA included) to get approved for a mortgage– home listed at $550k (2-family) rent for apartment will bring in approx $1,500 a month. Currently with a little under $30k in cash. $125k yearly income, pretty secure job (utilities, IT smart meters field). No credit card debt. Monthly student loans of around $350. Credit score in the 700s.
Yes you can. As far as the closing costs you can get the seller to pay up to 6% of those which usually more than covers them.
Your situation is similar to ours, and we qualified for a loan slightly higher than this house price without counting the rental income. So probably yes you will be able to do this or very close.
You’re very close. You may have enough to do it. If your credit score is over 750 and no debt then yes. But you’re debt is very low, so probably. Also though with rent so low, maybe you can find a two family in the low 400s.
You may need at least $40k for closing, including the $19+ down payment. If you wanted to bring the interest payment down by purchasing points, you might be looking at around $50-55k altogether. If you put down 3.5%, pay a couple of points to get to 5%, the monthly payment might look like $3,100 including FHA’s version of pmi but not including taxes or housing insurance. That could add another several hundred more. We’ve been doing similar calculations, and these were the numbers we came to for a house @ $550k using FHA. Your bank would be able to give you the best information though.
With FHA, you need to have between 1.5-2% of the loan amount at closing for the insurance. This is in addition to the mortgage tax.
You also pay FHA mortgage insurance, which is between 1-2% of the loan amount but spread out over your monthly payments. You’re on the hook for that for 5 years, at which point if you can get your appraisal to reflect that you have at least 20% equity in the place, you can cease the insurance payments. The FHA rates have been lower than regular rates, but you may have to be persistent with your bank to get them to quote you an FHA loan. A broker is not a bad idea.
No. I mean that with a conventional loan you can put most of the eggs in your basket down, and borrow enough to pay the closing costs. But with FHA loans, you put your 3.5 or 5% down and then you pay the closing costs cash. Adam and bsn can clarify/correct, but from what I know those costs on a house in Brooklyn can be as much as 50K, even with a larger-than-5% down payment.
My first house (see above), I could have put over 10% down, and made the loan a bit bigger to cover the closing costs but Noooooo, instead I had to put down only 5% and keep aside thousands I thought were earmarked for a down payment to pay those points and other closing costs.
It stunk, but then, here I am. And I wouldn’t be here without that first purchase.
“Trouble with FHA loans is that the closing costs are high, and you can’t finance them”
Dylan – Do you mean refinance them?
Never mind BHO, quikazoid, you’re headed in the right direction. Adam Dahill is a sweetheart. For the latest information contact him when he gets back or email bigswingingnick. Trouble with FHA loans is that the closing costs are high, and you can’t finance them. But an FHA loan can get you started, and right now they’re making a lot of loans anyway.
I bought my first house FHA with a low down payment, 14% interest rate, nasty PMI, and 10 points. That was about thirty years ago. Thanks to the little-house-that-could I’m still buying real estate, but for cash.
“This is why it is better to own than to rent.”
@ bottom.
***Bid half off peak comps***