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Established Member
shannonrobbie
Posts: 26
Registered: ‎05-16-2008
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Will a CoSigner Help me get approved

I applied for an FHA loan and was told it was denied for my dti ratio.. I make about 60K and have 676 a month in debt and am trying to by a 140K house with 5K down.  My mortgage processor told me that we can get it approved if my parents will co-sign for me (which they have already offered to do) since there credit scores are high enough that it can go thru auto underwritting (scores for them are mid to high 700's).
 
My question is .. is this really possible?  They only make a little more money than I do.. and their dti is probably close to the same ..maybe a little lower. How does them co-signing for me help my DTI problem?
Super Contributor
DallasLoanGuy
Posts: 6,129
Registered: ‎07-03-2007
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Re: Will a CoSigner Help me get approved



shannonrobbie wrote:
I applied for an FHA loan and was told it was denied for my dti ratio.. I make about 60K and have 676 a month in debt and am trying to by a 140K house with 5K down.  My mortgage processor told me that we can get it approved if my parents will co-sign for me (which they have already offered to do) since there credit scores are high enough that it can go thru auto underwritting (scores for them are mid to high 700's).
 
My question is .. is this really possible?  They only make a little more money than I do.. and their dti is probably close to the same ..maybe a little lower. How does them co-signing for me help my DTI problem?


They would be considered a Non-Occupying Co-Borrower. Very typical. Yes, their debts would be included in DTI.... but just by having another person on the hook sometimes seems to help. Especially if they have great credit.
 
Now, that is the answer to your question. Now I have a question.... what is your DTI? It looks in line to me. Even with a high tax rate, you should be ok.
 
 

 



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Established Member
shannonrobbie
Posts: 26
Registered: ‎05-16-2008
0

Re: Will a CoSigner Help me get approved

Thanks for answering.. I thought my DTI wasn't that bad.. but when I asked the processor why it didn't get approved she said DTI was too high for the house I wanted.
 
After my salary and commissions (which I have been getting for 4+ yrs) I average about 5K a month in pay.. and with my car loan and CC's my debt is $678.
 
My credit scores are not great.. mid is 587 and I have had a few collection accounts on my report.. most of them with last activity from 2005 and older... there is 1 that is 10 months old.  I have been employed at the same place since 2001 and in the same type of work for 14 years.. have 5+ years of good rental history at the same house (paying $1020 a month)
 
She told me that to approve me I would need a house that is around 110K.. but the ones I am looking at are 140K... I can afford the payment that goes with that 140K.. but I quess on paper they don't think so.. I am common law married so I have my husband income he can not go on the loan since his credit is really bad and had a judgement .
 
 
I hope adding my parents to the loan will help
Established Member
shannonrobbie
Posts: 26
Registered: ‎05-16-2008
0

Re: Will a CoSigner Help me get approved

Bumping up
 
Dallas Loan Guy.. what do you think.. will adding my parents help?
Super Contributor
DallasLoanGuy
Posts: 6,129
Registered: ‎07-03-2007
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Re: Will a CoSigner Help me get approved



shannonrobbie wrote:
Thanks for answering.. I thought my DTI wasn't that bad.. but when I asked the processor why it didn't get approved she said DTI was too high for the house I wanted. you didnt talk to the loan officer?
 
After my salary and commissions (which I have been getting for 4+ yrs) I average about 5K a month in pay.. and with my car loan and CC's my debt is $678.
 
My credit scores are not great.. mid is 587 and I have had a few collection accounts on my report.. most of them with last activity from 2005 and older... there is 1 that is 10 months old.  I have been employed at the same place since 2001 and in the same type of work for 14 years.. have 5+ years of good rental history at the same house (paying $1020 a month)
 
She told me that to approve me I would need a house that is around 110K.. but the ones I am looking at are 140K... I can afford the payment that goes with that 140K.. but I quess on paper they don't think so.. I am common law married so I have my husband income he can not go on the loan since his credit is really bad and had a judgement .
 
 
I hope adding my parents to the loan will help


something doesnt add up. they may have calculated your income wrong.
if what you are telling me is accurate, then dti is NOT an issue.
where is the home?
what is the payment they are calculating? principle + interest + taxes + insurance + pmi



* While I try to visit the forum often, please feel free to contact me directly with a link to your post if I fail to answer a follow up question.

* Lending across the entire 'Great State of Texas' since 2004
Established Member
shannonrobbie
Posts: 26
Registered: ‎05-16-2008
0

Re: Will a CoSigner Help me get approved

I only talked to her via email on Friday... but it didn't add up to me either.  I'm not sure how she calculated it.. My salary is 44K and then I average about 13K in commissions a year.  The loan amount she originally put on the loan app was for 150K.. and the payment she came up with was about $1500.. The house is right outside of Austin, Tx (in Leander).
 
I know my credit is not great.. so I would have understood needing a co-signer for that but I didn't understand for DTI.
 
I have 10k in a gift from my grandfather for the down and some of the closing.. and I found a house today that I like for 138,500 that I want to make an offer on..but I am scared the loan won't get approved again even with my parents on it.
 
 
Senior Contributor
mickie08
Posts: 3,299
Registered: ‎04-22-2008
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Re: Will a CoSigner Help me get approved

There must be some REALLY high HOA's and or taxes to be at 1500 payment on a 150K house.  We are looking at 2500 payment with on a 330K loan with HOA's and 400+ taxes per month.  I would ask to see the GFE that the LO put together to come up with that.  I would think that any reasonable taxes, etc that the house payment should be alot closer to 1000 than 1500...Maybe in the high 1100's or low 12's. 
Established Member
shannonrobbie
Posts: 26
Registered: ‎05-16-2008
0

Re: Will a CoSigner Help me get approved

I did a mortgage calculator and it came pretty close to the 1500 too... 150k with 3% down give me this
 

Monthly principal + interest:  $943

 Monthly tax: $329

 Monthly insurance: $59

 Estimated monthly payment: $1331

 Estimated mortgage insurance: $115

 Estimated total payment: $1446

 
Senior Contributor
mickie08
Posts: 3,299
Registered: ‎04-22-2008
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Re: Will a CoSigner Help me get approved

My bad on the math.  I would have expected to see lower taxes on that amount.  that is over 2.5%  Also, I forgot that we based ours on 5% down not 3% which woul dhave made more difference.  Also, I am check rates for home insurance as we are only going to be paying 60 per month in Sothern California for both homeowners and earthquale coverage.  My actuall homeowners policy will be under 40 per month and that is for a 320K house with a pool at 150 % replacement cost.
 
I would re-check with the lender as his number just do not seem to add up.
 
 
 
 
Super Contributor
DallasLoanGuy
Posts: 6,129
Registered: ‎07-03-2007
0

Re: Will a CoSigner Help me get approved



mickie08 wrote:
There must be some REALLY high HOA's and or taxes to be at 1500 payment on a 150K house.  We are looking at 2500 payment with on a 330K loan with HOA's and 400+ taxes per month.  I would ask to see the GFE that the LO put together to come up with that.  I would think that any reasonable taxes, etc that the house payment should be alot closer to 1000 than 1500...Maybe in the high 1100's or low 12's. 



taxes average 2.85%+ i Texas
 



* While I try to visit the forum often, please feel free to contact me directly with a link to your post if I fail to answer a follow up question.

* Lending across the entire 'Great State of Texas' since 2004

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