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Applied for mortgage; only approved for 'up to $392 per month payment'

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ShinBeats
New Contributor

Applied for mortgage; only approved for 'up to $392 per month payment'

DTI is around 40% with an average of $43,000 income between 2015 and 2016 W2's. Mortgage Fico (which is what my lender used,) is 657. 
I don't have the funds to immediately pay down my debt, but I found a house that has a lot of equity in it. I don't even needs  a lot more than $392 per month, I need at least a mortgage of $100k. Does anyone have any ideas of who I could apply for to obtain such a mortgage? I will have my Homebuyer's Certificate next week for down payment assistance in the amount of $5,000 through the Maryland Mortgage Program.

09/26/2010
EQ: 634

08/28/2014
EQ: 652
Message 1 of 4
3 REPLIES 3
StartingOver10
Moderator Emerita

Re: Applied for mortgage; only approved for 'up to $392 per month payment'


@ShinBeats wrote:

DTI is around 40% with an average of $43,000 income between 2015 and 2016 W2's. Mortgage Fico (which is what my lender used,) is 657. 
I don't have the funds to immediately pay down my debt, but I found a house that has a lot of equity in it. I don't even needs  a lot more than $392 per month, I need at least a mortgage of $100k. Does anyone have any ideas of who I could apply for to obtain such a mortgage? I will have my Homebuyer's Certificate next week for down payment assistance in the amount of $5,000 through the Maryland Mortgage Program.


Is the 40% with the new house payment or is that just your current debt?

 

When you are a W-2 employee your current income will be used to calculate your debt to income ratio (DTI). Is your current income higher than the $43,000 average?  Averages aren't used for W-2 employees unless you are an hourly type worker.

 

I sent you a couple of lenders so you can speak to them about a loan. Some lenders do have overlays that are more restrictive than the guidelines from Fannie or Freddie or FHA.  Neither of these lenders have overlays so you should be able to maximize your mortgage loan amount based on  your income and your current debt.  

 

As you noticed, your debt has a huge impact on the amount you can borrow. That is why we strongly suggest getting your debt in line before you ever apply so it doesn't negatively impact the amount you can borrow. 

Message 2 of 4
H-B
Regular Contributor

Re: Applied for mortgage; only approved for 'up to $392 per month payment'

You can take FHA loan which can go higher in DTI.

Message 3 of 4
CaliforniaLoaner
Valued Member

Re: Applied for mortgage; only approved for 'up to $392 per month payment'

My guess is that you have some other debt. Even if you have credit cards showing up that have minimal balances, a lot of time the minumum payment is $25. Those are easy things to pay off that will add to your purchasing power.

 

All in all, we would need to know a lot more about your current situation. From my experience, 36k should get you around a 200k purchase price as long as your debt is minimal so there must be something in there.

Message 4 of 4
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