Hi Everyone,
I am new to the mortgage boards, but spent a few years on the credit boards... 
I have a $30,000 401K loan I took out a couple of months ago to pay off most of my debt; roughly $250 is being pulled out of every paycheck to payback the loan. In general, will this $500/month expense count in my DTI?
My wife and I are thinking about seeing a loan offer by the end of this year and I also have a few questions regarding the pre-qual/ approval process...
Together, our income is $125,000 per year (excluding bonuses). She has no debt, except for a $360 monthly car payment, and scores in the 780s. I have some debt, a student loan of about $25,000 (deferred until 5/2014), a $4000 credit card balance (which will be paid off by the end of this year), a $580 monthly car payment, a $12,000 personal loan (which we are working on paying off right now -- monthly payment is $380) and my 401K loan. My scores, right now, are around the 730 range.
We're hoping to qualify for a $500-520K home loan with a $20K down payment for property values at $520-$540K, that would mean a monthly mortgage payment of roughtly $2900 per month (PITI). Is this possible?
@beb86 wrote:401k loan is a loan you are taking out against yourself so the generally dot count it against your DTI
+1
As far as the other question, make sure you factor in taxes, HOA fees, insurance, etc. when trying to figure out the affordability.
July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
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Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
June 2017 update: All scores over 820, just pure gardening now.
My husband and I make combined 180k per year... with that being said, we don't live in Cali, and we were able to buy a large house that is very comfortable for us for around 160k and we got a 20 yr mortgage. We wouldn't have ever gone that high on DTI, or on monthly housing payment but that's easy for us to say since we live in Oklahoma and cheaper houses are readily available. The question of affordability is really something that only you can answer considering what's right for your family.
Keep in mind that if an installment loan has less than 10 payments remaining, it won't count in your DTI. also, 401k loans won't count in your DTI. If the cars are fairly new, with a longer term remaining, you may be able to refinance them at a better rate. I don't know what rate you're paying but if you're paying more than 4% then you'd save a substantial amount of cash by refinancing cars.
Your income will be averaged over 2 years, and it will include bonus income... so for example... My bonus for 2010 was 14k, my bonus for 2011 was 16k... Average bonus income of 15k was added into my income calculations. That may help you out. What time of the year does your bonus pay out, and how much is the bonus usually?
If the bonus is substaintial, then it can really make the difference in the amount that you are approved for.
FICO 9: 
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
@Iincognito wrote:Hi Everyone,
I am new to the mortgage boards, but spent a few years on the credit boards...
I have a $30,000 401K loan I took out a couple of months ago to pay off most of my debt; roughly $250 is being pulled out of every paycheck to payback the loan. In general, will this $500/month expense count in my DTI?
My wife and I are thinking about seeing a loan offer by the end of this year and I also have a few questions regarding the pre-qual/ approval process...
Together, our income is $125,000 per year (excluding bonuses). She has no debt, except for a $360 monthly car payment, and scores in the 780s. I have some debt, a student loan of about $25,000 (deferred until 5/2014), a $4000 credit card balance (which will be paid off by the end of this year), a $580 monthly car payment, a $12,000 personal loan (which we are working on paying off right now -- monthly payment is $380) and my 401K loan. My scores, right now, are around the 730 range.
We're hoping to qualify for a $500-520K home loan with a $20K down payment for property values at $520-$540K, that would mean a monthly mortgage payment of roughtly $2900 per month (PITI). Is this possible?
You may look at the FHA limits for your county... Ventura county has an FHA limit of 729k. I would look at an FHA mortgage with a 3% down payment... use any extra cash to pay off or down the installment loans. Your sellers credit can be up to 6% towards closing costs, so keep that in mind when you make offers... If you want to chat with an FHA lender... I can give you mine that I used for my FHA streamline refinance. She was very helpful about outlining requirements and giving information... And she WONT pull credit until you tell her. She also will reply within 30 minutes if she's in the office... The only time she took more than 12 hours to respond was when she was home sick... but she emailed me back the following morning. I started chatting with her in May, she didn't pull my credit til july 30... and she only pulled it once. I closed on my streamline refi on 10/22/12.
If you want her name and contact info, feel free to PM me.
FICO 9:
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!
Filed Chapter 13 on 6/1/2017 after job loss. Discharged 6/1/2022.
Goal: Gardening!