Question about FHA and compensating factors.
How likely do you think it is of us to be approved for a 150,000 FHA Loan?
Credit: Our Credit Scores are not as high as we would like for them to be but we are working on them. I would have the lowest middle score so of course they would go by my 630. Neither one of us have any unpaid collections maybe 1-2 medical bills floating around and I do have a charge off for a car loan from 3 years ago that they are no longer actively pursuing. I know that the charge off should not give me too much hell. So besides a couple things our credit is pretty clean. We don’t have a lot of credit lines though. We have a CC where my husband is an authorized user. Our joint car payment and 2 student loans in deferment totaling about 10,000 dollars. So as you can see we do not have 3 active lines of credit each and at the most we probably have 2 each in our own names.
Income: my husband has had his job for 5 years, same employer and is also in school full time. I have had my job for a full year and have also been in school full time this whole year and last year but I have had minimal gaps in employment that last year, all to increase my pay and fit my school hours so technically I do have a full 2 years of employment. My current job now is through a staffing agency and my position is indefinite. I have been in the same position for the full year. Our total monthly Gross Income is 4280.
DTI: our DTI is fair. Front end is 17% and that is with 2% of each deferred student loan. With a 950 mortgage and insurance our DTI would be 40%. So we meet those requirements.
Savings: we have a total of 20,000 dollars in savings and plan on using 5,000 dollars of assistance for our 3.5 down payment and using our savings for closing cost. We should still have around 9,000 left over after closing and everything so this is equal to about 9+ months of reserves so I know that this can be used as a compensating factor?
Also we are looking in an area that is closer to both of our jobs so I know that that is also a compensating factor. We have limited use of credit which can also be a compensating factor. We plan on attending a home buying workshop which can also be used as a compensating factor. Do you think any of this will help us where the limited credit lines and my employment being with a staffing agency?