First time home buyer: How is our financial profile?

[Anonymous]

Hi All!

DW and I are about to venture into the housing market and I was hoping to leverage your experiences with dealing with the loan officer.  Looking in suburbs of NY...

We have good income but do hold some credit card debt.  We just had another girl so up to two children now so we are looking to move asap

Gross income: 220,000

Cash for down payment: 60,000

monthly debt: 1,300

The monthly debit is compromised of the following:

Student Loan: 700 per month

Car payment: 300 per month

Credit Card: 300 per month (balance is about 10K due to family vacation and buying children's furniture; currently 0% APR for 16 months)

So our front end DTI ratio is about 20% assuming an all in monthly mortgage of $3,500.  Back-end DTI ratio is about 28%

I have a FICO of 790 and my wife is about 810.  

Our DTIs are under the suggested DTIs.  Will we have any issues if we have that CC balance and student loan balance if we're still under the recommended DTIs? Will the loan officer only look at the debt in comparison to our income or will they actually have an issue with the balances? We have fairly strong credit scores and have always paid on time.  We expect to pay the CC balance by year-end with my bonus.

Any suggestions/comments are appreciated.

Thank you!!!

Mike

[mynameainttracy]

Everyone is going to tell you to get your balances down. I don't disagree with that.

I will give you my recent experience. We closed 8 weeks ago, VA, 3.375, $20k in credit card debt. Scores no where as good as yours, income half as much and DTI similar. Don't let your cc debt keep you from talking to a loan officer. I would go ahead. If you need to pay something down they will tell you.

[frugalQ]

i am of the belief that it's ok to have some credit card debt as long as your income and ability to pay supports it.  your income and DTI definitely supports 10K in credit card debt, and since you are taking advantage of 0% interest, it's basically free money.

With your credit scores, your income, and our low DTI...lenders will jump at the chance to finance your home.   they will not have any issue with the actual card balance amount. 

good luck!!!!

[frugalQ]

and congrats on the expanding family!!!!

[Revelate]

Proceed with confidence to quote someone smarter than me.

Aggregate balance isn't really a problem, it's your abillity to repay it and your likelihood for default.  Between your income and if those are anywhere close to legit FICO's, can't see any LO wouldn't love to have you walk through the door.

Your expected backend is way less than what the lenders I talked to were worried about.  Will be fine.

[Anonymous]

thank you all - makes me feel a lot better.

I purchased my FICO score and the one listed was my FICO 8.  It did show a FICO 5 (mortgage score) of 770 so a bit lower than my FICO 8.

Will move forward and hope the progress is as smooth as possible.