The FHA Low Down = Higher Payment?

[Jana Heetland]

So I get that the FHA loan allows for a lower down payment but if you don't have a lot to put down, how can you afford the higher monthly payment?

[Derrick Dill]

Lender calculates your debt-to-income. Some millionaires living paycheck to paycheck. Some minimum wage workers got 200k in the bank.

[Andrew Postell]

@Jana Heetland there is a formula that is used to calculate what you can "afford" and based on that affordability calculation that's what you get "prequalified" for in the amount of the home.  Well, as long as you are comfortable with it I guess.  If you want your "prequalification letter" to reflect a lower amount you certainly could do that but your loan officer can do some math to calculate what you can "afford" based on your income and debt load...it's commonly referred to as the "Debt-to-Income" ratio.  Hope all of that makes sense.

[Anthoney Hanks]

@Jana Heetland, Welcome to the BP community! You have found the right place for all the questions you have! Wishing you success! 

[Jana Heetland]

Thank you Anthony!  I love all I’m learning from BP.  Looking to build container homes in AZ. Is a tough proposition but I’m determined to make it happen! 

[Dan Guenther]

@Jana Heetland

Welcome to BP! I'd definitely recommend finding an investor friendly lender. You'd be amazed at the magic that an investor focused lender can work in securing financing for your investments!

[Jana Heetland]

Thank you! Do you recommend someone local or going through some of the bigger online companies?

[Dan Guenther]

@Jana Heetland

In my opinion, I prefer a local lender that actually knows my market and can be there (at the same time zone) when I need anything. Check out the network tab here on BP for some advice on local lenders/agents that might be able to help you out.