Mortgage Loans

[Bamagirl80]

Needing some advice  when I prepare my 2012 taxes next month ( I'm self employed) .  Here's my situatiion:  I plan to apply in Febuary for a FHA 15 yr. fixed at 3.0% (hopefuly).  The loan amount is $82,500. My TOTAL monthly payment will be $765. I have the follwing monthly expenses: Auto $288(balanace 5K) Student Loan $132(balance 2,800)  and credit card $40 (balance 1,700). * My 2011 filing shows $31,460 as my taxable income. Given my monthly expenses and 2011 filing, could someone give me an "educated estimate" of the  dollar amount I'll need to show for 2012 taxable income? *I'm really concerned with DTI and "back end ratio" and would like to know in advance. Any help is appreciated. Thanks!

[Mike_B03]

Does the $765 include principle, interest, PMI, homeowners insurance, property taxes and HOA fee?

Based on your monthly debt + the home payment ($1,255 total), you need to average $2,850 monthly income over the previous 24 months as shown on your tax returns. So that's $68,400 in 2 years. If 2011 shows $31,460 then this year needs to show $36,760.

This is based on a 43% back end which should be pretty safe. A lot of lenders will go with a higher DTI but better safe than sorry. This also gives you a 27% front end ratio which is well within the 31% thats normally required.

[Bamagirl80]

THANK YOU , and yes the $765 includes EVERYTHING you mentioned other than HOA (which I'm assuming means homeowners assn.) which  doesn't apply in my case. The amount needed is in the range I was hoping for. Thanks again. 

[Bamagirl80]

I found out today that my mom is giving me and my sister $1,500 each as a Christmas gift.  I'm seriously considering applying this to my student loan account . This will bring the remaining balance near $1,300. Iv'e read on several sites that installment loans with less than 10 months of payments remaining are not included with an FHA loan in regards to DTI.  If I do this  I will have less than 10 months owed given my payment schedule is $132.00 monthly. Just wanted some verification before I proceeded. Thanks

[Mike_B03]

I recall reading that online as well, about the 10 installments thing, but it may differ from lender to lender. I believe it's an FHA guideline but lenders often have their own overlays.