Mortgage Approval odds for a house around 400-450k
Just wondering what my odds of approval are on getting a house loan approved I’m also not sure if to go through FHA and I can put more than 5% down payment. I have about 50k I can put down. I don’t want to move into the house I just want to rent it out and make passive income. I’ve also heard of getting a house that needs some work and refinancing in a year to get a good mortgage. Any tips help
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u/og-aliensfan 11d ago
Your lender will likely pull mortgage specific FICO scores (2/4/5) so you'll want to know what those are.
Credit Myth #1 - You only have one credit score.
About 45 days out from applying, implement AZEO (All Zero Except One). This isn't necessary unless applying for a major loan, but it will optimize scores for the application.
Ideal Utilization [chart] - Step aside, 30% Myth...
What's the serious delinquency on your reports?
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u/WhenButterfliesCry 11d ago
He has 30 day late payments on 2 cards from 2023
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u/og-aliensfan 11d ago
Got it. In that case, I second the recommendation OP request goodwill removal of the lates.
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u/NiceGuysFinishLast 11d ago
Looking at your post history, you made $100K last year.
As someone who makes more, you do not want a mortgage on a $500K house.
That said, yeah, you'll have a shot at getting approved, because banks want your money. I certainly wouldn't recommend it though.
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u/Unusual_Oil_4632 11d ago
No one could tell you if you could get a home loan just based off your credit scores
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u/GuavaBrief5945 11d ago
Well you’ll need to live it it for a little bit. You can rent a room out but FHA and VA you need to use it as a primary.
Secondly yes, you won’t know just based on credit, lenders also use FICO 2,4,5 for mortgage scores.
Overall debt matters less than how much the debt monthly obligation. How much are the minimum payments on each.
Lastly, your payment would be in the 3-4k/mon at 500k. I’d guess FHA rate would be about 6.5-6.75 free rate, though depends entirely on lender and what your mortgage scores came back at.
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u/SamsaraSlider 11d ago
I came here to say that about FHA. If memory serves, you have to live in it as the primary for at least a year before renting it out unless you’re living in it and renting out a room to roommates, I think.
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u/ErraticRage 11d ago
Rental properties are far from passive income. You have to worry about so much (payments coming in, maintenance etc and can be very costly in the end.
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u/International-Mix326 11d ago
What's your income and debt? With your score, fha is better, since conventional rates would be pretty high for you.
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u/iwannahummer Knowledgeable 11d ago
mortgage scores are going to look much different than this. That TU F8 beacon could be 50-80pts higher than mortage scores, id go to myfico and pull all 40 scores before I walked into something without any information. Keep in mine a mortgage lender will use the score between your top and lowest score of the 3.
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u/H8RxFatality 11d ago
Can’t you only take a FHA loan if you’re living at the property?
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u/avatarstate 11d ago
Yes. They’re are for people planning to use it as their primary residency, not for people to get better rates on rental properties.
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u/jmartin2683 11d ago
If you have $50k to your name and a 650ish fico, you don’t need to be financing investment real estate. Very, very few people should ever do that and definitely not you.
Put it in the market.
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u/Burkedge 11d ago
Your odds are 0.00%
20-25% down needed for investment properties and im pretty sure FHA is for primary residence buying only
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u/Adrenaline-Junkie187 11d ago
You make 12k a month, arent paying your debt and want to buy a house. LOL, ok.
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u/che161 11d ago
I am paying my debt? My credit card debt was higher and my car loan was higher as well. What is the problem?
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u/BrutalBodyShots 11d ago
Are you paying your statement balances in full monthly? Earlier you said you opened a card to lower utilization, where if you're paying your statement balances in full monthly you can manipulate and lower utilization at any point regardless of your credit limits.
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u/che161 11d ago
I have been paying more than the balance statements every month
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u/avatarstate 11d ago
You are paying more than your balance on your credit card every month? Why? That doesn’t even make sense.
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u/Jayne_Dough_ 11d ago
What’s your DTI ratio? How long have you been at your job? Do you have a down payment and where did it come from? Those are the questions a loan officer will ask.
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u/che161 11d ago
My debt ratio is around 20% of my monthly income and I have 50K to put down, been saving for 2 years and I’ve been at this current job for a year and a half now
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u/Jayne_Dough_ 11d ago
Have you been employed in the same industry for at least 2 years, no gaps? If so, I think you’re ok. You won’t be A paper but you’ll get approved.
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u/creditwizard Top Contributor 11d ago
Credit attorney here. The Credit Karma scores (Vantage) are not relevant for most mortgage decisions - though that is changing. As for what you can approve, this sounds like a question for a mortgage broker, who shops around with mulitple lenders. I'd go on Yelp or Google and find a great mortgage broker in your area, who can assist. Or, ask a realtor you trust.
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u/PumpkinSally 11d ago
FHA loans require you to live in the home as your primary residence for at least one year. using an FHA loan with the intent to immediately rent it out is mortgage fraud...
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u/TakeMeAway1x3 11d ago
What amounts do you have in all of your accounts? Checking, savings, 401k and other retirement accounts? What is your current debt? They will want statements from all of these accounts and pay stubs. How long have you worked at your current job? It’s more than just credit score. Good luck
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u/Willing_Oil9194 11d ago
There’s so much that goes into the decision that just KK credit scores. Talk to a lender and find out :)
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u/avatarstate 11d ago
Can’t use FHA loans for investment properties. A rental property is not passive income. Buying a house and refinancing in a year is only beneficial if interest rates go down, which isn’t a sure thing. You don’t seem educated or mature enough to become a landlord.
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u/Inf1z 11d ago
What’s your income? Looks like you are trying to finance at least $350k so you would need to make over $120k-150k a year and have little to no debt.
Also try to get your FICO 3 score, this is what lenders use and it tends to be much lower than FICO 8. Most FHA lenders will want to see a credit score of 620 or higher. Qualifying for a rehab loan is more difficult.
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u/jpinakron 11d ago
The biggest issue I think most have missed is how you don’t intend to live in the house. So this will be an investment loan, not a traditional mortgage if you don’t intend to live there. So everything kind of goes out the window. You’re most likely (I’m not a loan officer so I don’t know) going to need 30% or more down. Your interest rate will be a lot higher. They may require you to have a set lease/ rental agreement in place. And if you don’t have any assets (a house of your own/ other equity to back up the loan) you may have a hard time even qualifying.
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u/Altruistic-Tap5331 11d ago
Depends on cost of home, if its a VA loan, how much down on loan.
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u/Billflet 11d ago
In the past you couldn’t get a VA loan for a rental unless it is a multi unit and you live in one of them. Maybe it’s changed but I doubt it.
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u/OkGuess9347 11d ago
They care about your income and the confidence they have in you to hold up for 30 years. That score is vantage, meaningless. Check creditwise for transunion fico 8 and myfico for equifax and experian for experian. All free.
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u/Awkward_Rent4749 11d ago
FHA will care about your debt report on credit report, loans etc to make sure you’re under a certain %
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u/Fr3shBread 10d ago
At this point credit scores are basically a box to check where bad credit is a red flag, and lower credit is used to justify a higher interest rate.
What matters a bit more is debt to income ratio. Basically they want to know that if you take on this debt, you have more than enough income to cover it and your prior debts.
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u/RobbinsNestCrypto 7d ago edited 7d ago
Previous Mortgage Loan Officer here. Your down payment is massive for your approval. Unless you have a large amount of debt or delinquencies, your odds are decent assuming you make the 140k to 150k you mention in the comments below.
FYI - the type of house you buy matters also (I.e. duplexes, multi family stuff are all different “riskier”buckets that are harder to approve).
Also, if you are self employed or rely on non W2 income it can also make it tougher. A lot of self employed people think what they pay themselves is what a bank can claim as income and that’s not how it works. If you pay yourself $140K from the company but write off a million dollars in random BS the government treats it like you’re broke and make no money. Thus so will the bank. (There is more to this but, just in general if you’re planning to take a mortgage while self employed, you should try to claim your income and NOT write off a ton of stuff… in general)
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u/inky_cap_mushroom 11d ago
Scores are pretty meaningless. Applications are approved or denied based on your overall credit profile. From this all we can see if that you have delinquent accounts which does not bode well for grtting a mortgage, but doesn’t inherently prevent you from doing so. If you want real answers you need to provide more useful information.