Mortgage Loans

[abetterlife]

Credit:  679 My Fico score

            1 credit card account closed – last 90 day late Jan ‘08

            1 collection acct = Paid in Full - $100   medical bill Paid Nov 07

            All other credit card accts are either Paid in Full or below 10% utilization – No lates

Income:  $54,500 annual income

Source of Income:   Employment

Monthly Debt Payments:  Student Loans  $142.00, Car $390, Personal Loan:  $289

Employment:  Full-time employee

Assets/Reserves:  45,000 (401K and savings)

Location:  Gaston County, North Carolina

Property:  Single Family Brick Ranch

Value:  175,000 – 200,000

Occupancy:  Primary Residence

Transaction Type:  Purchase

[hopefulKT]

Based on the info you provided; I don't see any reason why you would be denied. 

[YHWHUDAH]

Yes you do. However, you need to check your middle xredit score. Lenders use the middle credit score and not the highest or lowest of the three.

[nois]

You might want to calculate your back-end DTI ratio by estimating the PITI payments plus the monthly obligations you listed. A lot of lenders want this DTI below 36% unless there are compensating factors.

[webhopper]

I agree that you should work with a lender and find your ratios to make sure you won't be hitting it too close.

FHA is more lenient with ratios, and your 401k is a strong compensating factor.

[hopefulKT]

I don't know if the home you are looking at is in a USDA eligible area; but if it is, and you don't exceed the income limits, you should look into a USDA Guaranteed loan. They allow a higher total debt ratio (41%). Here's the eligibility site: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.

[tooleman694]

Im doing FHA and our ratio is over 50 percent.

[abetterlife]

Thank you all for the great information and advice.   I will definitely check into the FHA and the USDA programs.  These forums are great and the contributors are always very helpful!

[thankfulheart]

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tooleman694 wrote:

Im doing FHA and our ratio is over 50 percent.

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+1 My broker was willing to go to 55% back end with FHA, but I wound up coming in right at 50%. I had strong compensating factors as well, including income from other sources that couldn't be counted (not court-ordered).

[MrChairman]

I'm doing VA and my DTI is around 51-52%.