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So i got bold and applied for a mortgage and was shot down. For starters, I was told that my DTI was too high(57%). She went off an income of $89k. When i asked her To explain why it was so high, she had no real answers. All she stated was the number of accounts and student loans that my wife and I have in deferment(~$95k). Now what i do know is that she took 1% of that and calculatetd it into our DTI.
Overall she wasnt very helpful. She just kep mentioning the student loan debt and told me to try and pay it down. Obviously, if i had to pay the loans down first, i would never have a house anytime soon. So that suggestion was absurd. She wouldnt tell me how they calculated that either.
She also said that the number of accounts i had were high the disputes would need to be removed. She then mentioned and old merrick bank account from 2006 and a dipute with capital one about a car payment (they said i didnt pay the vehicle off, yet they had already sent me the title).
Our midscores were there (630ish, 650ish), but whats my next step? Should I do an income rebased repayment plan for my loans to lower my DTI?
Cardnalsyn,
What is your timeline?
@Anonymous wrote:Cardnalsyn,
What is your timeline?
It was trying to do it in a few months, but i have a lease to own agreement that ends in june of 2017, so thats the latest.
That is good news...
I am not an expert...but I do know this
1) You need another mortgage broker...there are many good one out there with all kinds of loans to offer...you should feel comfortable
2) You dont need to rush ..lease is up next june...there is plenty of time to get your scores up a bit and get all your ducks in a row..
Most people that want a home ... usually find away....
Right here you have all the help you need....
Mine happens to be more moral support than financial expertise !
^^^Agree with the above about taking your loans out of deferment + going to another mortgage lender. As stated above, stay away from big box banks like Chase or Wells or BOA.
Also, since she mentioned your total debt ratio, put down in a list here the monthly debt payments you make. There are easier ways to free up your total debt ratio than paying down your student loans. In fact, I would think that would be the most difficult way to get your back end ratio in line.
Maybe we can offer a few suggestions. All we need is type of payment (car, cc, loan) monthly amount due and total balance and interest rate. If you have car payments in your total debt ratio, those payments can hurt your ability to get a home financed too
Quick update...
I took the suggested advice and found another lender. He said the minum score is 640 (im at 630) and that the only thing i need to do is consolidate the student loans and set up a payment plan and we should be good to go. So right now im in the process of doing so.
In the meantime, Chase called me (i had put in an app 4 days ago) and asked to run my credit even though i told her i wasnt intersted in a conventional loan. When i tried to explain to her why, she cut me off and asked "so what do you want me to do?". I told her i was going with someone else and ended the call.
Hopefully eveything goes smoothly from here. Ill keep you guys posted. Thanks.
So you pulled a mic drop on her? Haha
Read up on FHA Income repayment plans, it looks like she used the 1% of balance. Is that the only debt calculated in your DTI? Do you have cc debt? Paying down cc debt to <9% will give you a score boost and help your DTI in the process.
@Anonymous wrote:So you pulled a mic drop on her? Haha
Read up on FHA Income repayment plans, it looks like she used the 1% of balance. Is that the only debt calculated in your DTI? Do you have cc debt? Paying down cc debt to <9% will give you a score boost and help your DTI in the process.
Yeah, they used the 1%, but even with that, my cc payments, and my 1 car note, it doesnt add up to $4227 a month in bills. Something was off.
@Anonymous wrote:Quick update...
I took the suggested advice and found another lender. He said the minum score is 640 (im at 630) and that the only thing i need to do is consolidate the student loans and set up a payment plan and we should be good to go. So right now im in the process of doing so.
In the meantime, Chase called me (i had put in an app 4 days ago) and asked to run my credit even though i told her i wasnt intersted in a conventional loan. When i tried to explain to her why, she cut me off and asked "so what do you want me to do?". I told her i was going with someone else and ended the call.
Hopefully eveything goes smoothly from here. Ill keep you guys posted. Thanks.
Chase isn't doing FHA loans anymore except for a very, very limited amount across the country. I bet the LO you spoke with is frustrated as it is a fairly new restriction (within the past year or so). Read this article: http://www.nationalmortgagenews.com/news/compliance-regulation/jpmorgan-leads-big-banks-out-the-door-of-fha-1062309-1.html
Same info, different article: http://www.cnbc.com/2015/09/21/chase-mortgage-ceo-red-flags-fha-loans.html
For others out there, if you are a FHA borrower you are wasting your time and money by applying to Chase.
OP, I am glad you found another lender that is better informed and can help you.