High DTI

[Anonymous]

Please tell me what my chances are of getting an FHA loan of around $190,000:

Monthly income - 6,180 (same job for 5 years) plus CS of 1,000 (will continue for the next 12 years)

Monthly debt payments 1,925

$3,000 currently saved towards dp and $22,000 in 401k (can withdraw or borrow up to 50% for home purchase).

I originally planned to wait until I could get the debt paid down a bit, but rent is increasing (lease runs through September) from $1,200 to a range of $1,300 to $1,400 (depending on length of the lease).  I can pay it, but would rather put that amount into a mortgage!

Credit scores are EQ 693, TU 635 (dinged for a zombie debt that I just PFD'd, hasn't fallen off yet), EX (FAKO) 683.

I know the debt payments are high, but I've been paying this amount of rent for the last 4 years - hoping that will be a compensating factor since my payments won't change that much.  No late payments at all besides old collection, which CA agreed to delete - just high payments. 

thanks in advance for input!

[Anonymous]

What are the debt payments (broken down)?

How expensive would a house/taxes be in your area?

With your debt already being at 31% dti you will need really strong compensating factors to buy a house unless you live in a relatively inexpensive area.  If you are assuming that a mortgage would be say 1300 with PITI, then that would put you at 52% DTI.  With alot of reserves, good job history, and high FICO this is possible but is definitley a harder sell.

[Anonymous]

Well, I was also counting my CS so that brings the dti down a little bit.  Payments are as follows:  $725 cc, $370 car loan, $830 student loans.  The car loan and student loans aren't going anywhere any time soon.  I can pay the ccs off over the next 2 years, but hoped to try to get an FHA before my rent skyrockets.  Taxes in this area are about $1600 - 2000. 

[Anonymous]

What is the price of home you are looking at?

[Anonymous]

Trying to back into a mortgage of around $1200 - 1300, depending on the interest rate in effect in a few months - maybe around $180,000 - 190,000?

[Anonymous]

Depending upon down payment, taxes, and interest rate, that might work out.

I would expect the UW to want you to have teh full 3.5% dp saved and keep the 401K money for reserves.  It think having good reserves and good work history are both key in going higher DTI.  Either way, if the CS is counted your DTI is alot more reaonable (closer to 43-45%) and alot easier to get an automated approval.

[Anonymous]

Thanks for the feedback!

[WannaHouse]

If I remember correctly from another post, I think the CS needs to have 12 months of cancelled checks or deposits to prove it is on a regular basis to count as income.

Just a heads up.

[Anonymous]

Yes, I asked about it on another thread.  I have 3 years of direct deposits and a court order.

[Anonymous]

I meant to add thanks for the heads up!  I appreciate any and all responses!