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Can't qualify due to high back end ratio of 64%

New Member

Can't qualify due to high back end ratio of 64%

Hello,
I applied for an FHA loan for 420,000 (The cost of livin in NYC ). I was not approved due to my high back end ratio. My middle credit score dropped from 684 in 2/08 to 654 4/08. I want to buy a house by summer. Will reducing my debt in 2-3 months help me?
3 REPLIES
Super Contributor

Re: Can't qualify due to high back end ratio of 64%

Depends on how much you are going to be reducing your debt by (in terms of monthly payments).  As soon as you have lower payments, you can use your new "debt load" to qualify with... you don't have to be at lower payments for a prolonged period of time or anything.  Would need more information in order to ascertain your situation though - such as income, monthly debt payments now, monthly payments after you reduce your debt - and also why your score dropped ~30 points in 2 months.
Mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime) since 2002, based in Irvine, CA and lending in all 50 states

Information that is needed to determine if you qualify for a mortgage

New Member

Re: Can't qualify due to high back end ratio of 64%

Thanks Shane
Here u go
Income- $60,000  + $40,000 from my contract work (I actually made 72,000 from my contract work but due to tax write off etc the number earned was 40,000.
 
Debt
Installment loans
90,000 student loan-389 month
36,000 car loan (I  am a co-signer for my hubby)- 672. month
13,0000 consolidation loan 379.00 monthly
 
Revloving debt
total 14,0000(5 credit cards)- total monthly payments approximatley 540.00
 
(i plan to pay off all of my revolving debt but was told that it would not help  me.
 
Thanks in advance
deb
Frequent Contributor

Re: Can't qualify due to high back end ratio of 64%

Deb,
 
I think what is hurting you is the student loan amount. I would focus on paying that down and then looki to reconsolidate into a lower monthly payment. That should help your back end ratio.