Profile picture for user816773

First time home buyer trying to get the process started.

My income is 42,000 and my credit score ranges from 750-840 and only owe 10,000 in school loans that are deferred for two years because I am in school. I do not owe money to any credit cards. I am 25 years old and first time buyer. I've had a credit history since 18yrs old. My question is, what are my chances of getting a loan and how much can I get? I'm looking into homes that are in the 200,000-220,000. Should I look in to cheaper homes or wait?


  • July 26 2012 - Los Angeles
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Answers (10)

Profile picture for Westside Realtor
You need an excellent buyer agent to assit you in your home search. A good buyer agent will also help you with the Pre-Approval process which is vital to home buying. Your Realtor will help you with every step of the process and explain everything to you as you go along.
Happy Buying!
  • November 10 2012
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Once you are pre-approved for a loan, and you determine your expenses including any student loan payments, you may want to consider a less expensive home.  This would obviously make your payments lower and loosen your budget a bit.  There are great foreclosure homes still available in the market and many are GREAT houses for a STEAL.  But you have to be ready to put down an offer right away, hence the importance of pre-approval. You will want to beware of homes that have suffered "foreclosure revenge" and always always hire your own inspector so that you can know the true condition of the home you are buying. 

Good luck with your search!
  • July 28 2012
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Sounds like you have a great chance on getting the loan you need. To be sure you want to always speak with a mortgage lender before contacting real estate agents to show you properties. Wish you the best!
  • July 28 2012
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Most individuals have the real estate process backwards. They try and find a real estate agent before getting pre-approved.

You will want to talk with a mortgage consultant as soon as possible. I strongly recommend you use someone like me in the mortgage banking/broker field.

Mortgage bankers and brokers typically have lower rates than large retail banks, partly because we work on the wholesale side of the industry.

You should be more than qualified with all of the information that you have stated. To make your life easier, you will want to get the actual payment figured out on your student loan, as most all lenders will require that you count the payment in debt to income ratios.
  • July 27 2012
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Hi there, 

So, it looks like you have a great chance of getting a loan, but the first thing you should definitely do is to make an appointment and consult a broker, bank or mortgage lender. Most traditional banks, local credit unions and online lenders provide preapproved mortgage services. My STRONG advice to you is to avoid using an unknown or disreputable lender in order to receive a realistic preapproval. Also compare offers from at least two different lenders. 

Prepare for the pre-approval by gathering information to verify your income, such as past federal tax returns, bank statements, and proof of current income. Your preapproval will be based on factors, such as your existing debt, employment history and income. 

Many deals fall apart because of these weak pre-approval letters, so make sure you research and do your homework in regards to who do you want to trust with this important process. 

Good Luck

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  • July 27 2012
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Profile picture for tonydelisi
I agree. You sound like you will have no trouble getting approved. As to how much you can afford, I would need more information to answer that. The first step and the nest move will be for you to get pre-qualified by a bank or mortgage company. You might select a Realtor and ask who they like to use. Realtors recommend lending sources that get the job done because they hate having deals fall apart.

It is free to be pre-qualified and the bank will tell you how much they think you can afford. A pre-approval also helps you negotiate a better deal on a home.

One piece of advice. Don't spend as much as the bank says you can afford.
  • July 27 2012
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Your first step is to go to a local bank and talk to them about a home loan and see if you can get pre approved as you will need that pre approval letter in order to put an offer in on a home.  Then ask friends and relatives who they would recommend as far as a realtor. Try to find one that specialized in first time home buyers or a buyers agent (one that works for you and not the seller)  Good luck and best wishes.
  • July 27 2012
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Lenders have tightened up the ability to get a loan, but with your credit score, which will help, the question will be asked how many years have you been making your current salary, on the past two years of your tax returns, what do your 2106 's look like (how much you have written off each year), how much you have for a down payment, are you going FHA or are you wanting to conventional.  there are a number of factors that go into it.  I don't htink you are looking too high in the range of homes you are wanting to look at.  I have my own brokerage and work with 4 different lenders that offer different programs and I am sure one of them can get you qualified and approved for what you are looking for.  my question to you would be how much are you wanting to pay per month, confortably, on a mortage?  Too many agents will get you qualified, and only show you properties in that price range, and not tell you how much your monthly payment will be.  Feel free to contact me and I can give you more info or you can go to my website [hotlink removed by Zillow moderator], click on the buyer tab, under home finance, and you can plus in different numbers to see what you would be paying per month.  Right now, rates are around 3.3.6%, which is unheard of, so now is a perfect time to look for a home.  If you have any questions or would like more information, please don't hesitate in contacting me.  Jason Irwin.  [hotlink and phone removed by Zillow moderator]
  • July 26 2012
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Profile picture for wetdawgs
Have you had a chance to tinker around with the "how much house can you afford?" calculator?

Do you have a down payment saved up (plus closing costs and a slush fund for repairs)?

I'm a strong believer in purchasing a home below one's means so that one can have a bit more flexibility financially (e.g. not eat beans and rice for all meals and take a vacation now and then).
  • July 26 2012
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Profile picture for RobertEaton

When buying a home and applying for a mortgage the banks look at your credit score and credit history to see how you have been about paying back your debt in the past and your current Debt to Income Ratio(DTI) to make sure that you can afford the home that you are buying, while still having your current monthly bills. One other thing that plays into your debt to income ratio is how much the taxes and insurance are every month on the homes that you are looking at currently. With a credit score of 740 and above you should be able to get a very good interest rate, especially if you will be putting 20% down on the home. My best advise that I can give you is to speak to atleast 2-3 mortgage lenders in your area and get pre-approved, so that you know exactly how much you can afford and all of your options. One thing that you want to remember is that you always want to own your home and not have it own you!!! Good Luck!

  • July 26 2012
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