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firsttimehomebuyer01

Likeliness of obtaining FHA mortgage as young career starter?

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Hey guys,

 

So out of school and I have been employed for the last 2.5 years with the same employer.  How likely would it be to obtain a FHA mortgage given my little credit history and earning income?

 

First, throughout school I was making roughly 20k a year, then once I got my full time job, the first year made 40k, second year 80k and on track to surpass 80k this year.  I began building credit around 1.5 years ago with car, school loans and credit card (card has been +3 years).  Also I have lines of credit I could use such as, rent, utilities, etc dating back the past 3 years.  For the last 1.5 years I've rented a house, paying $900 a month (utilities, car, loans on top of that), so I don't believe I will have any "shock" as far as payments go.  All of my payments have been on time and things like furniture had been paid off early.  

 

I already started talking to a few banks and decided to go with one and got pre-approved for 250k.  My mortgage rep is saying I should be good given that i'm interested in a house that's only 150k.  However I still have my natural doubts to all this passing an underwriter that easily.  But given my background, how likely would it be to obtain a mortgage given my little credit history (2 years) and really only 1 full year of decent earnings, although likely to continue?

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Sounds like you should be okay, so far you have done everything right. Making decent money etc. Just make sure you never default on a payment of any kind. Protect your credit now. Good luck.

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They will not go back into your history 1 year, let alone more than 2 years.  They will be interested in your current pay over the last 2 months and all of your debt - any credit card balance or loan of any kind you currently owe on.  They measure your debt to income ratio along with your credit score (630 and up should be good for an FHA).

 

If you are prequalified, then you should be just fine.  You just want to make sure that you do not increase your debt from now until you close on your house.  Do not put a bunch of charges on your credit cards, don't get any other loans and definately do not open any new credit accounts.

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Three years ago, I got a FHA loan for two hundred thousand, no money down and a good interest rate for the time. I also had two thirty plus thousand dollar charge offs against me. So, I know you can do it.

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One main thing to remember is that they will pull your credit report at least twice and maybe three times during the process. The last time will be just before you close. The reason being, is that once people are approved and nearing the time to close they run out and buy a bunch of stuff on credit like a new car, TV etc.

This changes your debt to income ratio and really screws up your credit and they will deny you in an instant if that happens. DO NOT buy a thing on credit until you have the keys to the house and the papers in hand to be safe. Ask any realtor and they will tell you the same. They have horror stories to relate regarding this. Good luck.

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