Can I qualify for a mortgage loan?

[Anonymous]

Hi.  I would like to get some expert advice on whether or not my situation would be good to try for a mortgage.  I would be looking at an FHA loan.

Scores: TU 739, EQ 736, EX ? - have a 769 fako for this but I know that doesn't count.

Income: $46,100 / year

Monthy Debts: $181 student loan, $145 Credit Card (Citi), $80 Credit Card (Chase)

Property taxes seem to run about 1.90% around here based on tax records. 

My parents will gift me $3500 for downpayment cost and I shold have an additional $4000 - $5000 saved up in the next month or so (end of Oct).  I also have a small 401K ($5000 or so).  Would like for closing cost to be payed by seller if possible.

One sticking point could be that I am listed as a co-borrower on my ex-wife's car loan.  This debt / car was assigned to her in the divorce but I am still on the note.  We always maintained seperate checking / saving accounts and I never made a payment on her car - she always pays it.  Can this be ignored for my DTI ratios based on that?  If not, I could ask her to refinance it in her name only, but it's almost payed off with 9 payments of $272 / month so she isn't paying a lot of interest and would just like to pay it out.

Also, if it helps my ratios I might be able to pay down / off my Chase card.

Let me know if you have any questions, need more info and thanks in advance for any help.

[Anonymous]

Your numbers look good... what price range were you looking at?

[Anonymous]

I've done some preliminary looking and it seems like $150,000 - $170,000 would be the ideal home range in terms of what I would LIKE to buy, but I could go lower if that isn't realistic.

[Anonymous]

Sounds like a good range to look at. For a $150k home you would need about $5k for a downpayment of 3.5% with FHA plus closing costs.

[Anonymous]

I think lenders will ignore the car payment if it is about to be paid off. Not sure the amount of time that needs to be left for them to leave it out.

[Anonymous]

lenders will not ignore a car payment that is 9 months left.  They will ignore detbs that are less than 100 and about to be paid off.  That said, if you can prove that th ex has paid all the payments (bank records and canceled checks would be needed), you may be able to get an underwriter to ignore it, or use it as compensating factors to allow high DTI.

As far as a purchase goes (and I will count the car payment because it is better to be conservative):

Income 46K per year = 3833 monthly income

31/43 debt ratios mean = 1200/1650 debt ratios (housing/total debt)

Other debts = 678

Leaving 1000 for house payment (rough numbers) puts you at around 115-130K. 

If your wife can get rid of the car laon, the UW discounts it due to proof of payment, or the UW allows higher DTI based upon the prrof of non payment onthe car, you could probably push that upwards into the 150 range and maybe even a bit higher.

Again these are ballpark figures based but give you an idea of what the standard file could get approved for.

[Anonymous]

Also, for FHA, the high FICO is an additional compensating factor to allow a higher DTI ratio.

[Anonymous]

A House payment of 1000 a month puts you closer to 175k at a  5% interest rate.

[Anonymous]

Well, I definately wouldn't want the car payment to be counted as I think that would really weigh down my DTI.  The ex-wife is fine providing cancelled checks / bank statements to prove payment only by her and this would be the preferred course.  If that isn't good enough to take it off my debt burden then her refinancing or paying it off would be a secondary option.  If I talk to a broker will they only prequalify me based on the conservative route of including this debt no matter what?  Anyway to work around this?

While I could find a home in the 120 - 130 range that would be very limiting in my local housing market and not very desirable areas / size of home. As far as budget goes, I'd be comfortable paying up to $1300 / month for a mortgage (PITI).

[Anonymous]

To above poster (forgot to quote),  1000 payment does not get you close to 150-170K because you have to count taxes, home owners insurance, PMI, and any HOA's that might apply.  The payment includes all of those numbers.  So a 1000 mortgage payment ends up easily being 13-1500 fairly easily.  In my case, a 1900 "mortgage" = 2660 payment per month once all other costs are added in.  All lenders require these to be factored into DTI.