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Kareninaz wrote:That's my problem. I'm trying to find out what the DTI ratios are. I believe for FHA they're 28% actually they are 31/43. the first number is housing ratio and the second in total ratio with other obligations included. automated underwriting can go over those limits. but I've got no idea for conventional. If my car holds out, the only debt I'll have next year is the mortgage, insurance and taxes. I'm trying to do whatever I can to be able to afford what is right now around 175-185K. I'm trying to come up with 20K down but could be more like 18. I'll have a few thousand in reserves at the time of closing also. Right now, cause I'm paying my CCs down, my scores are not quite 600 but my util is I believe around 80%, so I know when everything updates in another month or two, that should help my score shoot up because I just paid 2 off. I'm aiming for 650-700 if not higher by then. When I bought my last house in MA in 2002-03, it was a foreclosure and the bank if I remember right, was being very stubborn then. They wouldn't take much less than the asking price and still roll my closing costs in.I know things are different now, will be different in a year and hopefully are different in Arizona, but I'm not factoring any of that into my calculations.
Also, is it possible (I mean right now, I know this may change after Jan or by then,) to pay a point or two at closing to get the interest rate down? If the market doesn't fall like I'm hoping, I was thinking if I had enough extra to buy down from 6% (or wherever I qualify for with my credit in a year), I could get 1/4-1 point knocked off the rate, if they still do that. yes I'm also going to see if there's any way to pay less than 20% down and avoid paying PMI. So far, it doesn't look like it. I'm marginal on my DTI w/ 6% APR and 20K down with the market the way it is now. I don't want to count on any down payment assistance either just because of the bad experience I had before. I'm planning to work as much as I can, save as much as I can and cut back wherever possible. Anything I'm overlooking would be greatly appreciated.
Yes, this really bites! I am fully expecting to be shelling out a chunk of change as high as $10k to uncle sam this year forfeiting many of my deductions in order to show income that will qualify me for a a mortgage. The one thing they do allow you to add back into your income is any "Depreciation". It does NOT make sense that they won't allow you to add back in the deductions for utlities, portion of your home used to run your business, etc - as this is simply an allowable deduction and not a decrease in your income or out of pocket. Makes NO sense. Self-employed really get penalized, not to mention the fact that we pay more taxes to begin with. Argh!
bevy1234 wrote:Dont move to Mississippi .. I tried to buy a house that was a shack in the woods for 59000.00 my DTI was 19% at the time I also own my own business and make around 4200 a month.. Since being turned down for a house I have since then aquired a loan for a 10,000 dollar truck, a CLI on my cap One now at 2000.00 , 2 store cards 400.00 and 300.00 limits.. Still cant get a walmart card though.. XXXX GEMB... LOL Anyway it is sort of a trick when you own your own business , if you show a good amount of adjusted gross income you will probably get the loan but you will owe the IRS out the butt, If you write off everything that you use ( like I do in my business) your adjusted gross income is low and you wont get approved... Banks do not take into account that if you run your business from home you can write off 1/3 of utilities and rent or home note.. So they donot even take that into account...