650 credit score, 37k a year. Is it possible to be approved for 200-250k home loan?

The rule of thumb is you can afford up to 3 times your gross salary in loans, thus the most you could borrow is $111k, so you would need $90k plus closing costs to afford a $200k house.

Income and credit score are too low to get a loan of that size.

200K @ 5% Total cost of mortgage $386,512 on a 30 year fixed rate loan; Monthly payments $1,074

This does not include the required PMI if you don't have a 20% equity down payment up front and does not include homeowner insurance or property taxes, which are needed in an escrow, part of your monthly payments.

While you bring home about 2158 per month, and you could pay the mortgage, you would have problems meeting your other typical expenses to own the property. Also, your max mortgage loan will be 3x your income, or about 110K. This is typical regardless of where on the planet you plan to live, it is common practice among all banks and lenders.

Your score is fine, but unless you have at least half of your house paid for with cash up front, a 200K home is out of your reach. I counsel people never to seek a mortgage more than 2x their income, to give them funds for upgrades, maintenance and unforseen incidentals, and always put down at least 20-25% of the purchase price. Additionally, you should have at least 3-6 month's mortgage payments (and other expenses) in the bank, after you buy, to cover for any job loss, etc, to give you a financial cushion to work with.

All other debts should be paid off before you seek o buy your home, if possible.

The car loan kills you. Let me illustrate why.

Lenders will allow you a total payment, including mortgage principal, interest, and 1/12 of a year's property taxes and hazard insurance policy, of 28% of your gross monthly income.

$37 k is about $3,100 per month. 28% of that is $868. That is your MAXIMUM payment.

I know that property taxes in NC are much lower than in some other places, but hazard insurance can be higher due to a much greater risk of hurricanes and flooding. So I will use a figure of $100 per month to cover both, and that could be light.

So you're at $768 for the principal and interest.

Other debt such as that car loan, is calculated at a MAX of 8% gross monthly income. 8% of $3,100 is $248. You are over that by $202, and that's just for the car. Any credit card balances, student loans etc, will take you down even further.

So now you are at $566 - and it could be even lower if the property taxes and insurance exceed my guesstimate. If I'm guessing correctly, your MAX loan at 4% for 30 years at $566 per month is about $115k.

However, all of the calculators I ran the numbers through use a credit score. The LOWEST allowable is 660-699, and at that number, the best interest rate I am seeing through Bankrate.com - I used Raleigh NC - is 4.3%.

That takes your $566 down to below $110k. And if you're at 650, you either won't qualify or will be quoted an even higher interest rate.

You need to pull your score up, try to increase your income, save more cash ( I used 5% down, more cash on hand might get a slightly better rate) and consider getting rid of that car payment.

that income and that credit score do not bode well for any kind of mortgage loan

not going to happen. Look for something around half that price.

Your debt ratio would be the determining factor in how much a mortgage lender would lend you to purchase a house.

Buying a house or other property is a step by step process, this is the first step you should take in order to purchase a house is to be pre-approved or pre-qualified for a mortgage loan, by contacting a local mortgage lender. The rest of the steps will fall in place, no matter the type of property you are purchasing.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage lender, you can find one in your local telephone book or google for one followed by the city and state in which you reside.

Make sure this mortgage lender or mortgage banker is able to do government loans such as USDA, FHA and VA loans if you qualify for one. With a VA mortgage loan you are not required to have a down payment, this will save you on closing cost.

He will fill assist you in the filing out of the mortgage loan application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay listed your credit report and the estimated monthly mortgage payment would be added together. Based om your monthly income a formula would be used to determine what is called your debt ration. Your debt ratio would determine the amount a mortgage lender would allow you to borrow to purchase a house. This debt ration should normally not exceed 39%. A good debt ratio would be 35%.

When you speak with the mortgage loan officer you will need the following documents to complete the loan application, there will be others, but this will get you started.

#1 One month of pay stubs for each person that will be on the mortgage.
#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.
#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

Make sure, before you get your pre-approval letter, you and your mortgage broker go over all your options, as to all the mortgage programs you qualify for, the interest rate, monthly payments. This will allow you to make an intelligent decision.

Once you have your pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

You should select the loan that best suit your financial situation at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

So select the best option for you and your financial situation.

You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign. Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

You would be required to use a local title company that would make sure there are no additional liens on the property take care of all the legal recording at the county recorder's office. You should be sent a title deed in approximately 14 business days, by the title company used to close your sale transaction.

The down payment of a house would depend on the mortgage loan program you are approved for.

There are many and varied mortgage loan programs available to you than just the conventional mortgage loan, as well as the down payment required of each mortgage program.

#1. Conventional mortgage loan

Normally 5%-10% down payment.

A. 20% down If you want to avoid Private Mortgage Insurance (PMI)

#2.FHA mortgage loan

Normally 3.5% down payment

There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

#3. VA mortgage loan

There is no down payment

You must have been in the United States military active duty, veteran, or retired.

There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

#4. USDA mortgage

There is no down payment required

Normally to be approved for this mortgage loan the property you are purchasing must be a farm or rural property.

There is a monthly fee akin to PMI that you would be required to pay for the life of the mortgage loan or until you refinance the mortgage loan to a conventional mortgage loan.

I hope this has been of some benefit to you, good luck

"FIGHT ON"

Not even close. You might be able to qualify for $175,000 on the top end, but I can tell you that stretching your income that far is going to make your life suck. Unless you can double your income you need to be renting or buying some cheap little cottage.

Google "front end vs back end loan ratio". Basically, a front end ratio of 28% of your monthly income is the maximum that can be dedicated to your mortgage payments. A back end ratio of 36%-41% is the maximum amount of your monthly income that can be dedicated to all of your other debt payments. Exceed these %ages and it's not likely you'll be getting a mortgage.

137K a year yes, 37k a year, no. the bank has guielines and usually they won't grant a mortgage for more than three times your income, which would be closer to $110K. your payments on a $200K loan would be around $600 to $700 a month plus another $100 to $300 a month in taxes, which is not going to be affordable for a $37K annual gross income.