Qualifying for a Mortgage?

[alleykatt592]

I have a question for all of you Mortgage experts out there. What are the requirements on qualifying for a mortgage? I know every situation is different and there are many contributing factors, but what are the basic, bottom of the line criteria? I am looking at buying a house (a beauty in my neighbourhood is going into foreclosure) but at the present moment my credit score is only 648, due 100% to a debt left to me by my ex husband. I make between 35 and 50 k a year (contract work so hard to pinpoint exactly) My new hubby just started a union job 2 months ago and is making $2400 weekly but last year his income was VERY low due to being on Workers Compensation. He has no credit cards or loans, so basically has no credit history. My credit score was good before the debt from my ex. I currently have one credit card, a car loan, and an ATV loan. (All paid on-time) I was just wondering if there was any way that we might qualify, either together or separately. I live in a small town and a house like this doesn't come up every day. This is the only reason we'd even consider buying this early. I don't want to waste my time applying if there is absolutely no way we'd ever qualify.

[MortgageQueen]

Hi Alleykatt,

Your bureau isn't as bad as you think. You didn't mention what you thought the purchase price would be?. . .or what your Downpayment might be?. . .which are pretty crucial. You have the debts of an ATV loan and car loan, so that will cut into what you can afford monthly. You are also (or so it sounds) self employed and your DH is "newly" employed. These factors make it tougher, but not impossible. I would need more info tho, to give you any direction.

On the other hand, if you have a 20% Downpayment, you could probably just get a mortgage based on equity only. This is a slightly more difficult mortgage to obtain. If this is the case, just PM me

[MortgageMaster]

Hello: Lenders look at several things - credit history, ability to repay, income and job secruity. Your husband in all probably would not qualify. Lenders look for a credit history of at least 2 active trade lines - credit card and/or lines of credit. They also look for 2 years of employment. Even though he has an excellent income now he only has the 2 months of employment.

You have the active trade lines. However the fact that you mentioned that it was a contract job would probably disqualify you also as you (in the lenders mind) would not have any income when the contract is over.

If you multiply your income by 3 that would give you a rough idea of the maximum house price that you would be looking at. With your income it would probably be in the $150K range.

You have the incomes to support a mortgage but right now you have the other factors working against you.

The one thing your husband should do is to establish a credit history. He needs to get a couple of credit cards, use them and pay them off each month. However without the credit history he may need to get secured ones to start out. He should talk to an advisor at his bank about this.

Lenders have tightened up their rules over the past months which makes it more difficult for people hoping to buy a home.