How much house can I afford with a VA loan?

With a FHA loan, your debt-to-income (DTI) limits are typically based on a rule of affordability. This means your monthly payments should be no more than 31% of your pre-tax income, and your monthly debts should be less than 43% of your pre-tax income. However, these limits can be higher under certain circumstances.

If you make $3,000 a month ($36,000 a year), your DTI with an FHA loan should be no more than $1,290 ($3,000 x 0.43) – which means you can afford a house with a monthly payment that is no more than $900 ($3,000 x 0.31).

FHA loans typically allow for a lower down payment and credit score if certain requirements are met. The lowest down payment is 3.5% for credit scores that are 580 or higher. If your credit score is between 500-579, you may still qualify for an FHA loan with a 10% down payment. Keep in mind that generally, the lower your credit score, the higher your interest rate will be, payday loans in Utah which may impact how much house you can afford. Continue Reading