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Posts: 12
Registered: ‎07-24-2012
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Will we qualify for a mortgage? High DTI/Potential other problems

 My husband and I are hoping to buy our first home in 15-18 months (end of 2013). I'm working diligently right now to get our financial life in order, and wanted to know if this looks like it would get approved for an FHA mortgage.

 

  1. Credit.  Mid scores are both around 700 right now, anticipate that they will be higher next year as we pay off more debt. Nothing bad on me, except lots of CC debt/high utilization. Husband has no CC debt, big student loans and a few lates 4-6 years ago.
  2. Income.  Gross we will be at $114K/year, $9500K/month
  3. Source of income. Paycheck
  4. Monthly debt payments.  $2036 in Student loans, anticipate CC minimums to be around $1200 a month.
  5. Employment We are currently both employed FT, W2 jobs. I've been here for 2 years, husband has been at his job for 4+ years. He is looking for another job, and this is a potential concern - if he gets another job and has only been there 6 months or so before we apply, will this be a negative? New job would be more money, and in the same field that he has been working in. We are both college graduates (BS for him, MS for me)
  6. Assets/Reserves.  We should have $15,000 liquid cash, Plus $13,000 in my 401K and $8,000 in his 401K
  7. Location.  Bristol County, MA.
  8. Property.  Single Family Home
  9. Value. $230,000-$260,000
  10. Occupancy.  Primary residence
  11. Transaction Type.  First time home purchase

I've run all the numbers, and I'm concerned because our back-end DTI would be around 50%. We (particularly my husband) owe a LOT in student loans, but have been faithfully paying them. I also have a decent amount of credit card debt that I have been working to pay off. I can get the DTI down, but it will require paying off more of the CC debt and having less in savings, and we are quite anxious to purchase something soon - potential growing family and all. I'm also worried because everything I read says that someone should be at a job for more than 2 years - my husband is actively searching for a new job right now, and if we make this happen in my anticipated timeline (15-18 months) he won't have been there the 2 years. Is he better off to wait to find something new?

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Posts: 7,225
Registered: ‎09-16-2011
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Re: Will we qualify for a mortgage? High DTI/Potential other problems


greenmint wrote:

 My husband and I are hoping to buy our first home in 15-18 months (end of 2013). I'm working diligently right now to get our financial life in order, and wanted to know if this looks like it would get approved for an FHA mortgage.

 

  1. Credit.  Mid scores are both around 700 right now, anticipate that they will be higher next year as we pay off more debt. Nothing bad on me, except lots of CC debt/high utilization. Husband has no CC debt, big student loans and a few lates 4-6 years ago.
  2. Income.  Gross we will be at $114K/year, $9500K/month
  3. Source of income. Paycheck
  4. Monthly debt payments.  $2036 in Student loans, anticipate CC minimums to be around $1200 a month.
  5. Employment We are currently both employed FT, W2 jobs. I've been here for 2 years, husband has been at his job for 4+ years. He is looking for another job, and this is a potential concern - if he gets another job and has only been there 6 months or so before we apply, will this be a negative? New job would be more money, and in the same field that he has been working in. We are both college graduates (BS for him, MS for me)
  6. Assets/Reserves.  We should have $15,000 liquid cash, Plus $13,000 in my 401K and $8,000 in his 401K
  7. Location.  Bristol County, MA.
  8. Property.  Single Family Home
  9. Value. $230,000-$260,000
  10. Occupancy.  Primary residence
  11. Transaction Type.  First time home purchase

I've run all the numbers, and I'm concerned because our back-end DTI would be around 50%. We (particularly my husband) owe a LOT in student loans, but have been faithfully paying them. I also have a decent amount of credit card debt that I have been working to pay off. I can get the DTI down, but it will require paying off more of the CC debt and having less in savings, and we are quite anxious to purchase something soon - potential growing family and all. I'm also worried because everything I read says that someone should be at a job for more than 2 years - my husband is actively searching for a new job right now, and if we make this happen in my anticipated timeline (15-18 months) he won't have been there the 2 years. Is he better off to wait to find something new?


Have you looked at getting on an income based repayment plan for the student loans, it might reduce your monthly student loan payment....

 

How much is left to pay on those student loans?

 

 


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Member
Posts: 12
Registered: ‎07-24-2012
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Re: Will we qualify for a mortgage? High DTI/Potential other problems

The majority of the student loans are Private, so they do not qualify for IBR - and the total balance is around $230,000 - yes, I know, its ridiculous, but we are doing the best we can with it. The loan terms have already been extended, so the payments are not going to be any lower than they already are.

Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: Will we qualify for a mortgage? High DTI/Potential other problems

Since you are going FHA, a 50 percent backend is fine.

Senior Contributor
Posts: 3,065
Registered: ‎11-02-2009
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Re: Will we qualify for a mortgage? High DTI/Potential other problems

Just did FHA and had only been at current job for 1.5 years.  Same field for 8 years.  It wasn't an issue.  They just verified my employment at my last job.


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