topic Am I calculating my DTI correct?? in Mortgage Loans

Am I calculating my DTI correct??

live-n-learn — Fri, 13 Mar 2015 18:09:22 GMT

Hi good people,

Can someone please verify if I'm calculating my DTI correctly.

I want to apply for a mortgage at the end of the year and I'm just running my numbers to see where I stand.

ok,

Monthly gross= $6423.20 ($2960.00 weekly x 2.17) I get paid biweekly

Estimated PITI mortgage payment= $2000 (I just chose this # because the house prices i've seen are between $230k-$300k)

backend debt min. payments= $1117.00 total: Auto ($507 with more than 10 payments left),

student loans ($200 with more than 10 payments left)

installment loan ($399 with more than 10 payments left)

Credit Cards ($10.00) (plan is to not have any CC debt just something to show usage)

Online calculators are telling me i'm at 48% DTI (dangerously high)

Is this true? am I over extended? am I missing anything?

Its been a VERY long time since I bought and sold a house and I know so much has changed.

I didnt factor in a down

payment because most likely I will try FHA / 3.5% down

Please help!

Re: Am I calculating my DTI correct??

Glenn_S — Fri, 13 Mar 2015 19:14:49 GMT

Calculate your wage this way:

Hourly rate X 2080 hours (one year) = Annual Salary

Annual Salary divides by 26 (If paid every 2 weeks. If you get paid twice monthly [15th and 30th] then divide by 24).

Example: $15.00 per hour X 2080 = $31,200

$31,200 divided by 12 = $2600.00 monthly <<== Corrected from brain fart

Front End DTI is Rent/Mortgage payment divided by monthly wage

Back end is rent/mortgage AND other debt payments (car, CC, SL, taxes, etc.) divided by monthly wage.

Re: Am I calculating my DTI correct??

Its_Me — Fri, 13 Mar 2015 19:10:41 GMT

@Glenn_S wrote:
Calculate your wage this way:

Hourly rate X 2080 hours (one year) = Annual Salary

Annual Salary divides by 26 (If paid every 2 weeks. If you get paid twice monthly [15th and 30th] then divide by 24).

Example: $15.00 per hour X 2080 = $31,200

$31,200 divides by 26 (every 2 weeks) = $1200.00 monthly
$31,200 divided by 12 (months) = $2600 monthly

Front End DTI is Rent/Mortgage payment divided by monthly wage

Back end is rent/mortgage AND other debt payments (car, CC, SL, taxes, etc.) divided by monthly wage.

Re: Am I calculating my DTI correct??

Glenn_S — Fri, 13 Mar 2015 19:12:16 GMT

Thats what I get for trying to post quick while at work...LOL

Re: Am I calculating my DTI correct??

live-n-learn — Fri, 13 Mar 2015 19:16:17 GMT

Oh gosh, I guess the my original DTI estimate was right... I still got 48%

sigh...

Re: Am I calculating my DTI correct??

Revelate — Fri, 13 Mar 2015 19:38:01 GMT

FHA can go north of conventional DTI ratios based on the strength of your credit file as I understand it, 50% isn't out of the realm of possibility and sometimes files have been approved at higher than that.

You may be able to refi the car to gain some room; or if there's value in it, take some cash out of the refi and pay off the installment loan or similar. Or hoard pennies and airstrike one of the loans. With unemployment figures dropping fast, might be able to pick up some part time income too to help speed things up. Or 401K loan, or hoard excess and buy down the loan payments with either high down or points. Etc. ad naseum.

You've got some time to figure it out, 48% currently isn't a death sentence.