CC debt and obtaining a mortgage.....

[Anonymous]

How much credit card debt would stop a lender from doing a deal? I have a friend with around 40k in CC debt but he makes $150k a year, has 30k in cash 12k in IRA-401k and has 700 fico scores. He is looking to do a FHA or some similar low down payment financing. 

Thanks for all of you help!! I'm going to try and get my buddy on here!

[trdmlc]

You would need to calculate his back-end DTI, which is the combination of recurring montly debt payments + mortgage payment.

Depending on the lender and the loan type, some will allow upwards of 50% backend.  Ideally you should be around 40%.

I'm currently going through the process and my back-end is 48%. I was pre-approved and the LO doesn't seem to think it will be an issue, as he puts through loans with this combination of score and DTI regularly.

[BrianB_The_Loan_Professor]

---

@Anonymous wrote:

How much credit card debt would stop a lender from doing a deal? I have a friend with around 40k in CC debt but he makes $150k a year, has 30k in cash 12k in IRA-401k and has 700 fico scores. He is looking to do a FHA or some similar low down payment financing. 

Thanks for all of you help!! I'm going to try and get my buddy on here!

---

Believe it or not lenders arent as worried about the total amount owed as they are the ability to make the payments

They will look at the minimum monthly payments in relation to the total gross monthly income

if the ratios work they should be fine

B