High Front End Ratio's

[Anonymous]

Mid Score of 616 and am trying to qualify for 300K Mortgage.  PPrice 315K -5% down; 5 mo's reserves.

Ratio's would be 42/43...Would the front end ratio create a problem with FHA?

[DallasLoanGuy]

Probably not ok. I have seen better scores denied for lesser front ratio.

Who calculated the ratios?

[ShanetheMortgageMan]

You could toy around with things, put more money down/less reserves but your debt to income ratio would be lower... or you could just put 3% down and have more reserves and by having more reserves it might be the compensating factor that FHA needs in order to accept the higher front debt ratio.  Your loan officer can tinker around with their system, more reserves/less down payment and more down payment/less reserves to see which one would get you approved.

[Anonymous]

I calculated the ratio's based on the Only debt I would have which would be the Mortgage and two cc's of $15/mo each.  Figuring a Pmt with Taxes/Ins/Mip would run about 2300...Income = 5600

What if I went with Adjustable rate...or what they still qualify me at the fixed rate?

Don't want to fully go through with the qualifying with a broker yet because I am hoping scores will be up by July.

Thanks for your reply!

[DallasLoanGuy]

Shane is right...... your loan officer can toy with the deal and see what goes thru.

Many times I have had to take an FHA deal from 3% down to 5% down to make the computer accept. Or get a gift from family to cover something so the borrower could have reserves after close.

I am not saying that you will not get it..... but it is pretty unlikely on the surface with the limited info we have. However.... it is not out of the realm and if you get a good loan officer to tweak you deal, then you might be able to get something done.

Get some reserves deposited. That will help.

Remember: This is a total package!!! Huge 401K and 20yrs on the job gets more latitude than a job hopper with $2K in the checking.

Does that make sense?

[Anonymous]

Yes, thanks again for the info.

 I  used to work in the mortgage biz 5 yrs ago but so many things have changed.  Never did FHA and now figuring that is the route I will be headed toward unless I can get my scores up.  I'm pretty confident with my broker but I will still shop around when it comes time. 

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