Chance of Approval - Shane or Dallas?

[fatboy1027]

I am about to apply for a mortgage in Texas.  Purchase price is $375,000 with seller paying $10,000 in closing cost and I will have 5% down.  My current mid-score is 686 and am waiting on a collection item to be deleted any day.  I have no other negatives on my report.  My income is $97,000 with a 20% bonus paid annually.  I started this job in August and received a bonus for $7500 last year.  My bonus for this year will be around $19,000 and I have a letter from my employer that documents the salary and bonuses.  I have other debts that total $930 a month.

If I get a decent rate, I calculate my ratios to be around 46% without my bonus.  With my bonus for last year, my DTI is 42% and with my bonus for this year, my DTI is 38%.

What are my chances for approval?

[DallasLoanGuy]

you would need to provide 2yrs proof of the bonus.

 likely average it over 2yrs as well.

 the employer wrote a letter spelling out future bonuses are a 'lock'?

[fatboy1027]

How does it work if you have changed jobs?  I did receive smaller bonuses at my past employer however I don't work there anymore. 

The letter states that I am participant in the company's bonus plan and receive annual bonuses up to 20% of my pay or $19,000.  It is also states that bonuses are standard practice and are expected to continue in the foreseeable future.

Do you think there is any other documentation needed to get at least the bonus from last year included?  What are you seeing for DTI ratios?  Have heard under 45%, does this seem correct?

Thanks for your help!

[Anonymous]

Are you already going FHA? If not have you considered it?  You could just put down 3.5% instead and then take the money that is 1.5% ($5625) and try and pay down some of your existing debts to reduce the minimum monthly payments that you have for those (thus reducing your debt part of DTI)

[fatboy1027]

FHA is out of the question due to the purchase price of the house.  Only up to 271,000 in my area.

Thanks.

[Anonymous]

Ah, I had the same problem (also in texas but in a non high area too).

Just as a warning tho my LO warned me that if we went conventional (we were considering it) then we may have problems getting PMI with my husbands mid score (now 660) and even if it were just mine (694) so you may want to look into that!

[fatboy1027]

Thanks for the warning.  Hopefully my mid-score will be over 700 after this item is updated.  Did they tell what the minimum score is for PMI now?