Forget it?

[sg784]

We are down to one income. We're doing fine. Im doing really well on this budget, and I am on a "leave of absence" from work, not an official "quit". They have to keep my senority position, everything for at least one year. I have great job security. (Healthcare, and Im union)If money got tight I could go back with only one week notice. They would HAVE to put me on the schedule even if it meant taking someone off with less senority.

We had previously decided we wouldnt try to buy a house until atleast next spring. when I went back to work. Back when we were originally looking at houses, we got approved for a CHFA (connecticut housing finance authority) loan fixed rate, 100% financing, loan for 140k+change At the time we couldnt find anything we liked so we let the preapproval expire and decided it wasnt the right time. I just came across a darling little house on a decent amount of land in a very nice area for an unbelieveable price.

almost half of the original preapproval amount. 79k.

Is it even possible that we could qualify for a loan with only one of us working? or would they turn us down based on the income difference?

Should I just wait until next year like originally planned? I really really like this house......How do you know if its a good idea to chase something, or if its just a pipe dream?

Ive done the crunching with the online mtg calculators and our payment plus an overestimated figure for taxes and ins would be similar to what we're paying for rent right now.

[zersha]

They would look at your debt to income ratio. I am not sure of the exact figure, but I believe they like it to be less than 40%.

So you could still get approved for a home if all your debt payments , including whatever the new mortgage would be (don't forget tax & insurance too), would be less than about 40% of your gross income.

By debt, they would only count things like cc payments, car loans, student loans, etc, not utilities or living expenses.

[sg784]

Using an online debt to income ratio calculator Im given 29% as a figure. this is using the estimated mortgage payment instead of current rent and current debt payments( 3 medical bills that I have on a payment plan)

[zersha]

Originally Posted by sg784

Using an online debt to income ratio calculator Im given 29% as a figure. this is using the estimated mortgage payment instead of current rent and current debt payments( 3 medical bills that I have on a payment plan)

Then I bet you could still get a mortgage on just one income as long as your credit it good. They've probably made the requirements a little stricter now, unless you were doing a FHA loan.

Sounds like a good deal for only 79K.

[RoadWorkAhead]

Sounds great, and I'd totally do it. For reference, I bought at 85k with about a 6.5% interest rate, in the 100 yr. flood plain (so I have to have a little extra insurnance) and my mortgage was at its highest 670/mo (last year) and is 608.85 this year including everything. But I had 20% down so the mortgage was based on 68k total. And the taxes are based on the low end fair market which is significantly higher. Don't know how your state compares to ours, but thats lower than rent even at the highest it was, for a 2 bedroom apt. in the slums

[RoadWorkAhead]

And a 30 yr. mortgage, that piece helps doesn't it!

[phathui5]

Would your dh make enough to cover it?

[sg784]

Originally Posted by phathui5

Would your dh make enough to cover it?

From the budget i just made, yes. But would a lender think we could?

As far as credit, how much stricter has it gotten? we qualified for the last loan with "fair" credit. Mine has since improved but his is about the same last i checked. How long does it take for a credit score to go up?

[zersha]

Originally Posted by sg784

From the budget i just made, yes. But would a lender think we could?

As far as credit, how much stricter has it gotten? we qualified for the last loan with "fair" credit. Mine has since improved but his is about the same last i checked. How long does it take for a credit score to go up?

A lender will mainly look at your debt to income ratio, and your last 12 mo of payment history. So if you have been current on all your debts in the last 12 mo, and don't have any unpaid collections, you should be fine.

There is no set time for how long it takes a credit score to go up, since it depends on alot of variables. I think the days of sub prime lending are over, so people with low credit scores (poor to fair) will have more trouble getting conventional mortgages, but FHA mortgages will still be available to people with less than perfect credit.

If you haven't done it lately, you should pull your free credit reports at annualcreditreport.com (not freecreditreport.com - they are just a trial for a pay service). As long as you have nothing derogotory, no unpaid collections or other accounts, have been good the last 12 mo, and your dti ratio is good (29% is good for lenders), you should be approved.