Questions about an FHA mortgage?
My girlfriend and I are in the process of looking for our first place. We found the condo we’d love to purchase and are now looking to take the next step. The condo price has been reduced to $ 140,000 and we are located in Michigan.
It seems we’d be looking into a FHA loan for 30 years, but I have some general questions about getting a loan based on our credit and income. Hopefully someone can give me some insight so I know what to expect.
Basically she is a 728 credit score and has always paid everything perfect. As for her income she makes around $ 40,000 per year. Myself am much lower with my credit score at a 587 and make around $ 45,000. With my credit, I have never really paid anything late, have never defaulted on anything but between three credit cards I hold with a combined limit of around $ 3500 the cards are maxed out which I know is hurting me right now. I am in a position where I can completely pay them off right now or at least pay them down almost all the way depending on what is more beneficial to my credit score. I can’t think of any other reason my score is where it’s at right now. If I do pay them off or down, will I even see much of a quick rebound in score, or enough to make any difference? I have two 30 days late on credit cards in the last 5 years showing on my credit report, and have never been late on an auto loan payment – payments ranging from $ 340-$ 650. My current highest minimum amount due on a credit card is $ 60 per month. Hopefully that helps give some background to my situation.
So all in all if someone can offer me a little help or advice I would appreciate it. Also, do they use both scores on a joint mortgage and how do they take both incomes into account?
Thanks in advance!
Thanks for the responses so far. No, I have not been pre approved yet. That’s the next step. I was referred to someone, I emailed and called today, however their email response said they are out of the office until the 29th of this month for the holiday.
Since this is all new territory for me I’m really not sure who I should take to other than the person I was referred to by the condo community.
What exactly will I need to provide in order for a pre approval? Should I be shopping around, and if so, how do I go about doing so? Sorry for the ignorance on this subject, this is all unfamiliar.