How much would I prequalify for, for a mortgage?

Question

I have recently gone through the process of cleaning up my credit and I have seen positive results with scores of 652, 643 and 650 being reported by the big three today. Ideally, these will continue to improve over time, but there are no derogatory's or collections to be cleaned up. I am bringing home about $3500.00/mo, after taxes and I have no debt to speak of save some really minimal revolving account balances, well under the 35% utilization recommended. I am trying to find out the amount I would prequalify for with regards to a mortgage under these circumstances. Any ideas?

Answer 1

on a fha loan your max payment is $1505 on a conventional or subprime loan is $1750. heres the problem though, they go off of the GROSS amount not the take home so it is 43% of the pre taxed income on fha and 50% on conventional/subprime. based on  todays rates that would be about a $200,000 loan amount. there are other compensating factors in order to qualify however, like being able to prove 12 months of ontime rental, haveing 5 ontime tradelines (these can be alternative trades for FHA like untilities ect., you rent counts as 2) and downpayment of atleast 2.7% for FHA, 5% for convential/subprime and being able to pay closing cost or having a seller pay them for you.

Answer 2

650, your middle score, is still pretty low.  I wouldn't be able to approve a loan at 650 score.  There are several websites that will calculate payments.  www.mortgagecalculator.com

Answer 3

$160,000 - $200,000.