What determines credit worthiness when trying to buy a home?

I know your credit score matters a lot, but does the price of the home mean your score must be higher if the home is more expensive? For instance: If, I have a 665 score and want a $155,00 home as opposed to a $310,000 home, would I be more likely to get disapproved for the more costly home? Please explain.

Your credit score determines your credit worthiness and what interest rate you will get.

How much you can borrow is determined by two ratio's. They are your Gross Debt Service Ratio (GDS) and your Total Debt Service Ratio (TDS).

The GDS is all your monthly payments and they need to be under 40-44% usually of your monthly income.

The TDS is the payments on mortgage, interest and taxes and this must not rise above the 32-36% of your monthly income.

The GDS and TDS % rate varies depending on the lender and then again your beacon score or FICO score or credit score (whatever you want to call it).

Your credit score will determine the loan program you are qualified to get as well as the interest rate for the loan program.

Your score will not have very much to do with how much house you are qualified to purchase. That is determined by the amount of money you earn compared to the amount of open debts you have on your credit report.

This brings out a term called debt ratio which should be in the neighborhood of 33%-35% now through in the monthly mortgage payment and this debt ratio should be between 36%-38%.

I hope this is of some use to you, good luck.

"FIGHT ON"