Buyer questions
The questions buyers ask us, answered
Each answer starts with the short version, then shows the math on FHA, Conventional, VA and USDA, and what to do if your numbers come up short.
Credit
Can I buy a house after a bank turned me down?Often, yes.Read the answerCan I buy a house after bankruptcy?Yes.Read the answerCan I buy a house during Chapter 13?Yes.Read the answerCan I buy a house with a 500 credit score?Yes.Read the answerCan I buy a house with a 580 credit score?Yes.Read the answerCan I buy a house with a 600 credit score?Yes.Read the answerCan I buy a house with a 620 credit score?Yes.Read the answerCan I buy a house with an eviction on my record?Yes.Read the answerCan I buy a house with no credit score?Yes.Read the answerCan I get a mortgage with late payments?Yes.Read the answerDo collections stop me from getting a mortgage?No.Read the answerDo medical bills in collections hurt a mortgage?For the approval, mostly no.Read the answerDoes shopping for a mortgage hurt my credit?Very little.Read the answerHow long after a foreclosure can I buy a house?Three years with FHA, measured from the date the foreclosure was completed, and FHA uses the same 3 years after a deed in lieu or short sale.Read the answerHow soon can I buy after a short sale?Three years with FHA, counted from the date the short sale closed, and FHA allows a purchase with no wait if every mortgage and installment payment was made on time for the 12 months before the sale.Read the answerWhat credit score do I need for a USDA loan?USDA sets no minimum credit score of its own.Read the answerWhat credit score do I need for a VA loan?VA itself sets no minimum credit score; it tells lenders to review each veteran's credit history rather than rely on a number.Read the answer
Income
Can I buy a house if I'm over 60?Yes.Read the answerCan I buy a house if I'm self-employed?Yes.Read the answerCan I buy a house on 1099 income?Yes.Read the answerCan I buy a house on one income?Yes.Read the answerCan I buy a house on retirement income?Yes.Read the answerCan I buy a house with a new job?Yes.Read the answerCan I buy a house with gig income?Yes.Read the answerCan I buy a house with my partner if we're not married?Yes.Read the answerCan I change jobs while buying a house?Yes, but tell your lender before you accept the offer.Read the answerCan I use alimony to qualify for a mortgage?Yes.Read the answerCan I use child support to qualify for a mortgage?Yes.Read the answerCan I use disability income to buy a house?Yes.Read the answerCan I use overtime and bonuses to qualify for a mortgage?Yes.Read the answerCan I use part-time income to qualify for a mortgage?Yes.Read the answerCan I use Social Security or SSI to buy a house?Yes.Read the answerCan I use VA disability income for a mortgage?Yes.Read the answerCan my parents co-sign my mortgage?Yes.Read the answerDoes my spouse have to be on the mortgage?No.Read the answerHow much house can I afford as a single parent?On FHA, a single parent can put up to 46.9% of gross monthly income toward the house payment and 56.9% toward all debts, the same as any buyer.Read the answerHow much income do I need to buy a house in Florida?With FHA at a 5.75% rate and light other debts, you need about $5,031 a month ($60,400 a year) of gross income for a $300,000 Florida home and about $5,769 a month ($69,200 a year) for a $350,000 home.Read the answer
Down payment and cash
Are there USDA-eligible areas in Florida?Yes.Read the answerCan family gift me the down payment?Yes.Read the answerCan I buy a house with cash I saved at home?Yes, once the cash has a paper trail.Read the answerCan I buy a house with no money down in Florida?Yes.Read the answerCan I use a gift of equity from family?Yes.Read the answerCan I use my 401(k) for a down payment?Yes, you can borrow up to half your vested 401(k) balance, capped at $50,000, and put it toward the down payment and closing costs, or take a hardship withdrawal instead.Read the answerDoes down payment assistance have to be paid back?Some of it never has to be paid back: Florida Housing's HFA Preferred PLUS and HFA Advantage PLUS seconds are forgiven 20% a year and gone after five years.Read the answerHow much do I need to save to buy a house?On a $350,000 FHA purchase in Florida, plan on about $25,500 with no help: $12,250 for the 3.5% down payment and about $13,300 in closing costs and prepaids.Read the answerHow much is FHA mortgage insurance?FHA mortgage insurance has two parts: an upfront premium of 1.75% of the base loan, usually added to the loan, and an annual premium of 0.55% of the loan with less than 5% down or 0.50% with 5% down or more on a 30-year loan.Read the answerHow much is PMI?Private mortgage insurance (PMI) on a Conventional loan usually runs about 1.50% of the loan a year near a 620 credit score down to about 0.46% at 760 and up with 3% down, and it drops as the down payment grows.Read the answerWhat is the Florida Hometown Heroes program?Florida Hometown Heroes is a 0% interest, no-payment second mortgage from Florida Housing Finance Corporation worth up to 5% of your first mortgage amount, used for the down payment and closing costs.Read the answerWhat is the minimum down payment on a house?The minimum is $0 with a VA loan, a USDA loan in an eligible rural area, or FHA 100% financing from a 580 credit score.Read the answer
Debts
Can I buy a house while paying child support?Yes.Read the answerCan I buy a house with a judgment against me?Yes.Read the answerCan I buy a house with an IRS payment plan?Yes.Read the answerCan I buy a house with student loans in default?Not with FHA or USDA while a federal student loan is in default, because both bar buyers who are delinquent on federal debt and lenders screen for it through HUD's CAIVRS database, and VA needs the debt paid or under a written repayment agreement.Read the answerCan I get a mortgage with a high debt-to-income ratio?Yes, FHA approves total debts up to 56.9% of gross monthly income with an automated approval, Conventional loans go to 50%, and VA can approve above its 41% guideline when residual income is at least 20% over VA's table.Read the answerDo deferred student loans count for a mortgage?Yes on most programs: FHA and USDA count 0.5% of a deferred balance as the monthly payment and Conventional counts 1%, so $60,000 in deferred loans counts as $300 a month on FHA and USDA and $600 on Conventional.Read the answerDoes a loan I co-signed count against me?Yes, the full monthly payment on a loan you co-signed counts in your debt-to-income ratio unless the other borrower has made the last 12 months of payments on time from their own account.Read the answerHow can I lower my debt-to-income ratio fast?The fastest ways are to pay credit cards or small loans to $0, which removes their whole minimum payment, to document an actual income-driven student loan payment in place of the lender's estimate, and to add a co-borrower's income.Read the answerHow much house can I afford with a car payment?On $5,000 a month of income with $110 in card minimums, you can carry a $300 car payment and still reach about $296,000 on FHA at a 5.75% rate, the same price as with no car payment.Read the answerShould I pay off credit cards before buying a house?Usually yes: a card paid to $0 drops its whole minimum payment from your debt-to-income ratio, and in our $4,800-a-month example, paying off one card with a $243 minimum lifts the FHA price from about $248,000 to about $282,000.Read the answerWhat is a good debt-to-income ratio?For a mortgage, a total debt-to-income ratio of 41% or less is good: it meets VA's guideline and USDA's standard and sits well inside Conventional's 50% and FHA's 56.9%.Read the answerWhat is the max DTI for an FHA loan?FHA's max DTI is 56.9% of gross monthly income for total debts and 46.9% for the house payment alone, with an automated approval through FHA's TOTAL Scorecard.Read the answer
Buying and closing
Can a first-time buyer buy a duplex in Florida?Yes.Read the answerCan I assume an FHA or VA loan?Yes.Read the answerCan I buy a duplex with an FHA loan?Yes.Read the answerCan I buy a fixer-upper with an FHA loan?Yes.Read the answerCan I get an FHA loan more than once?Yes.Read the answerCan I remove FHA mortgage insurance?Yes.Read the answerCan the seller pay my closing costs?Yes.Read the answerDo I need flood insurance in Florida?Yes, if the home sits in a FEMA Special Flood Hazard Area (a flood zone starting with A or V) and you buy it with an FHA, VA, USDA, Conventional or other federally regulated mortgage.Read the answerFHA or Conventional: which loan should I get?Below about a 740 credit score, FHA usually gives the lower monthly payment and approves total debt-to-income up to about 56.9%, so it's the stronger choice for most first-time Florida buyers.Read the answerHow long does a pre-approval last?Most pre-approval letters are good for 60 to 90 days.Read the answerHow long does it take to close on a house?Most Florida home purchases with a mortgage close 30 to 45 days after the contract is signed, and a buyer who is fully pre-approved with documents ready can often close in about 30.Read the answerHow much are closing costs in Florida?On a $350,000 FHA purchase, a Florida buyer's closing costs and prepaids come to about $13,300, roughly 3.8% of the price, and on FHA and USDA the seller can pay up to 6% of the price toward them.Read the answerIs now a good time to buy a house in Florida?Now is a good time to buy when your own numbers are ready: income you can document, a full house payment you can carry, and a down payment or a program that covers it.Read the answerShould I rent or buy in Florida?Buying usually comes out ahead in Florida once a house payment close to your rent is within reach and you plan to stay a few years.Read the answerWhat documents do I need for a mortgage?Most buyers need a government photo ID, pay stubs covering the most recent 30 days, W-2s for the last two years and the last two months of statements for every account holding down payment or closing money.Read the answerWhat does pre-approved mean?Pre-approved means a lender has pulled your credit, reviewed your income and asset documents and run your application through underwriting rules to set the price and loan amount you qualify for.Read the answerWhat happens if the appraisal comes in low?Your lender bases the loan on the lower of the purchase price or the appraised value, so a low appraisal means the price comes down, you bring more cash, or you and the seller split the gap.Read the answerWhat not to do before buying a houseBetween pre-approval and closing, don't open new credit, finance a car or furniture, co-sign for anyone, change jobs without telling your lender, make cash deposits you can't document, or miss a payment.Read the answerWhy use a mortgage broker instead of a bank?A mortgage broker sends one application to several wholesale lenders and places the loan with the lender whose rules approve it at the best price, while a bank can offer only its own loans under its own rules.Read the answer
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