topic Re: Maximum mortgage help! DallasLoanGuy or any bankers :) in Mortgage Loans

Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Mon, 05 Oct 2015 20:45:10 GMT

Hi, I have a question of what I will be able to purchase. I'll list my current liabilities as well as my income.

My base salary is $48,100 yearly. $4,008 monthly.
If I have OT figured correctly (it is ongoing guaranteed, not sure how they check this). In 2014 my OT was a little over $14,000, for 15' I will have around $15,000 in OT. I took that they add those and average it for the two years. If so it comes to around $1,208 monthly.

Monthly Gross= $5,216

Liabilities-

Auto Loan-$608 monthly
Auto Loan-$284 monthly
Motorcycle Loan-$173 monthly
CC-$0 at time of application
Student Loan-$50 monthly but only owe a balance of $700, at time of loan I will owe $500 which equates to 10 monthly payments (will pay off so no need to use).

Only other thing I'm worried about at time of application is rent verification. We rent from my wife's Aunt and only pay $300 monthly. A lot of times in cash. Rent was actually paid in May and we paid up until March using my wife's trust fund inheritance. She won't be on the loan though.

Credit scores will be in low 700s at application time if no changes to my file (don't foresee any).

I need a rough estimate of total I could borrow. Thanks everyone!

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Mon, 05 Oct 2015 20:48:27 GMT

FHA

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

Anonymous — Mon, 05 Oct 2015 21:02:01 GMT

@cartwrna wrote:
Hi, I have a question of what I will be able to purchase. I'll list my current liabilities as well as my income.

My base salary is $48,100 yearly. $4,008 monthly.
If I have OT figured correctly (it is ongoing guaranteed, not sure how they check this). In 2014 my OT was a little over $14,000, for 15' I will have around $15,000 in OT. I took that they add those and average it for the two years. If so it comes to around $1,208 monthly.

Monthly Gross= $5,216

Liabilities-

Auto Loan-$608 monthly
Auto Loan-$284 monthly
Motorcycle Loan-$173 monthly
CC-$0 at time of application
Student Loan-$50 monthly but only owe a balance of $700, at time of loan I will owe $500 which equates to 10 monthly payments (will pay off so no need to use).

Only other thing I'm worried about at time of application is rent verification. We rent from my wife's Aunt and only pay $300 monthly. A lot of times in cash. Rent was actually paid in May and we paid up until March using my wife's trust fund inheritance. She won't be on the loan though.

Credit scores will be in low 700s at application time if no changes to my file (don't foresee any).

I need a rough estimate of total I could borrow. Thanks everyone!

Not a banker or realtor, but I too am looking for a home and wondered the same thing. I saw another post similar to yours and one of the posters stated that the best way to figure out what you can afford is to take the maximum allowable backend DTI for FHA, which is 56.99%. 56.99% of your monthly income of $5216 is $2972. Take away the $892 in auto loans and the $173 for the motorcycle, and you're left with $1907 for mortgage PITI. Not sure if there are any HOA dues as this will affect what you can afford. Now with that being said, there may be lender overlays with a backend DTI of 56.99. Also, not sure where you live as FHA limits vary by metropolitan area. Also unsure of your down payment as this will make a difference as well. Rent verification is not always needed if you have a clean credit profile and good scores and have not moved a lot recently. Once again, lender overlays differ by state/city/loan type/company etc.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Mon, 05 Oct 2015 21:22:38 GMT

Definitely couldn't afford that. After taxes on my gross, health insurance, and other mandatory stuff I'd be eating at a soup kitchen 😂. I'm just hoping to qualify for 150k. I figured it up with MHI, taxes, and insurance and the total payment will be $800-900 depending on interest rate. Just not sure how to figure it all, I've used calculators but the reassurance of a mortgage banker telling me would be much better. I tried calling a few today but they all seem pretty busy.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

Anonymous — Tue, 06 Oct 2015 00:05:37 GMT

With 3.5% down on an 150k home, you would be looking at roughly $900-$1100, depending on HOA fees, interest rate, and what the property taxes for your area would be. The simplest way is to calculate what you could afford monthly, and from there get an estimate about what you could afford total. Using an estimated DTI of 43% would leave you able to afford a mortgage worth $1177/month, which is around 174k total using the 3.5% down and an interest rate of 3.75%. Keep trying to get a hold of a mortgage banker, I'm sure they'd love help you out and paint a clearer picture. Hope I've been able to help you even a little bit.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

StartingOver10 — Tue, 06 Oct 2015 11:18:20 GMT

Remember, the payment you are calculating also has to include mortgage insurance in addition to the other items. You need to include:

Principal and Interest
Real Estate Taxes
Homeowners Insurance and flood insurance if applicable
Mortgage Insurance (if applicable and for an FHA loan it is mandatory)
HOA if applicable Note: HOA payments are included for your qualification but is paid directly to the association and not to the lender

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Tue, 06 Oct 2015 15:56:13 GMT

Yes, principal and interest 30 years @3.5% would be around $675

MHI @ .85 would be around $106 monthly

Homeowners insurance@ $80-100 monthly estimated based on type of home and my agent.

Taxes-$2,000 yearly so around $165 monthly, that's estimated as taxes show on county website as only $350 a year but house has been completely remodeled 2 car garage added and another addition to house.

I'm looking at around $1000-1050 monthly with everything I believe

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

StartingOver10 — Tue, 06 Oct 2015 16:04:54 GMT

@cartwrna wrote:
@Anonymous, principal and interest 30 years @3.5% would be around $675

@MHI @ .85 would be around $106 monthly

Homeowners insurance@ $80-100 monthly estimated based on type of home and my agent.

Taxes-$2,000 yearly so around $165 monthly, that's estimated as taxes show on county website as only $350 a year but house has been completely remodeled 2 car garage added and another addition to house.

I'm looking at around $1000-1050 monthly with everything I believe

That is well within your capacity to purchase, even if you use the old 29% front end ratio 'rule' on just your base income ($4008/month).

Remember FHA sets maximum ratios for which they will insure the loan and you are well below that figure.

Lenders have their own overlays and you, the consumer, have your own criteria.

Most people have a comfort level for a mortgage payment that is less than the maximum amount FHA will insure IME (a good thing!). You sound like you are prepared well.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Tue, 06 Oct 2015 16:22:26 GMT

I think we talked last year about this StartingOver10, I wasn't in as well of a position and was about to pull the trigger, thankfully I waited. I'm still waiting until January though. Due to some high balances on credit cards my score plummeted to 660-662-664 per what the mortgage lender pulled :-/ they were over 700 with no balances. So using my savings that was for down payment to pay them off due to finding out I was eligible for the NHF Platinum down payment assistance program which pays 3-5% towards down payment . The only other issue is a collection account with Verizon which still has a balance of $1,100 owed. It shows up under accounts instead of under collections with no late pays but is derogatory. Curious if they will say anything about it. Where I stand currently even with the 660s scores I made it through DU. I have to change lenders due to the NHF Grant not being eligible with my current one though :-/ Hopefully they don't say anything about me depleting my savings to pay off the credit debt, but the interest rate will drop pretty good once I get back to 720 I believe the lender said, which is well worth it.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

Anonymous — Tue, 06 Oct 2015 16:37:37 GMT

I'm waiting until January as well & paying down balances. I'll still have about $25k in savings to fund down payment, closing costs & reserves. Good luck!

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

ezdriver — Tue, 06 Oct 2015 16:42:29 GMT

In Northeast Florida, my buyers are paying about $7 PITI/month for every $1,000 of mortgage. So a $150,000 motggage will have your mothly PITI payment at around $1050.00 and that is a conservative number. Using that number and your cash available for down payment, you can calculate home much house you can afford to buy.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Tue, 06 Oct 2015 16:44:02 GMT

Reserves aren't needed for an FHA loan, although it is a good idea. I'll still have some "reserves" such as 401k and retirement accounts and hopefully a couple grand in savings. As far as closing costs I'll use the seller concession route. On FHA loans sellers can contribute up to 6% towards closing costs, prepaid fees, and points. You can figure out a number on the sale price of the house and then add up to 6% to that number for them to pay the costs. Given the house appraises for enough.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

ezdriver — Tue, 06 Oct 2015 16:48:35 GMT

Be careful about buying any home with $0 reserves after the closing. The day after you move in something may break and will cause major pain if there is no reserve funds to pay for repairs. The lender may not require it but life lessons suggest reserves are necessary.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

StartingOver10 — Tue, 06 Oct 2015 17:15:40 GMT

@ezdriver wrote:
Be careful about buying any home with $0 reserves after the closing. The day after you move in something may break and will cause major pain if there is no reserve funds to pay for repairs. The lender may not require it but life lessons suggest reserves are necessary.

^^^This is so true. Remember, something breaks when you are least prepared for it! So keep a reserve just in case.

Also the interest rate for FHA loans is not really score sensitive except if you are below 580 and you are well above that score. Conventional loans are score sensitive both for the interest rate and more importantly for PMI.

I have found the interest rate to vary from lender to lender but not based off credit scores as much as whatever their internal policy is for FHA loans. I have seen two competing lenders offer different rates on the same file by .25% or even 3/8ths of a percent. You do see a difference in interest rate if the lender has to pick up some of your closing costs on a FHA loan.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Tue, 06 Oct 2015 17:25:04 GMT

Luckily, the house were working on is a complete remodel and the sellers are including a warranty on all majors for it. http://www.zillow.com/homedetails/1975-Greenwood-Dr-Ottumwa-IA-52501/76884561_zpid/ That is the home.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Tue, 06 Oct 2015 17:27:18 GMT

I have an appointment with a mortgage banker at 3:30pm to go over all my questions. I'm coming prepared with a trimerge report from the previous lender I spoke with from 9/09/15 for the new one to go over. I may also cover the idea of a conventional mortgage. They offer the 97% conventional (just 3% down), if they think that would be a better idea. Hopefully she penciled me in until 5 LOL

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

StartingOver10 — Tue, 06 Oct 2015 17:33:37 GMT

Excellent!

Make sure she provides you the costs for each. The 3% down payment conventional loan seems pretty expensive (closing costs and payments) so compare it directly with FHA and you can then see which is better for you.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

DallasLoanGuy — Tue, 06 Oct 2015 17:46:01 GMT

@Anonymous wrote:
@cartwrna wrote:
Hi, I have a question of what I will be able to purchase. I'll list my current liabilities as well as my income.

My base salary is $48,100 yearly. $4,008 monthly.
If I have OT figured correctly (it is ongoing guaranteed, not sure how they check this). In 2014 my OT was a little over $14,000, for 15' I will have around $15,000 in OT. I took that they add those and average it for the two years. If so it comes to around $1,208 monthly.

Monthly Gross= $5,216

Liabilities-

Auto Loan-$608 monthly
Auto Loan-$284 monthly
Motorcycle Loan-$173 monthly
CC-$0 at time of application
Student Loan-$50 monthly but only owe a balance of $700, at time of loan I will owe $500 which equates to 10 monthly payments (will pay off so no need to use).

Only other thing I'm worried about at time of application is rent verification. We rent from my wife's Aunt and only pay $300 monthly. A lot of times in cash. Rent was actually paid in May and we paid up until March using my wife's trust fund inheritance. She won't be on the loan though.

Credit scores will be in low 700s at application time if no changes to my file (don't foresee any).

I need a rough estimate of total I could borrow. Thanks everyone!
Not a banker or realtor, but I too am looking for a home and wondered the same thing. I saw another post similar to yours and one of the posters stated that the best way to figure out what you can afford is to take the maximum allowable backend DTI for FHA, which is 56.99%. 56.99% of your monthly income of $5216 is $2972. Take away the $892 in auto loans and the $173 for the motorcycle, and you're left with $1907 for mortgage PITI. Not sure if there are any HOA dues as this will affect what you can afford. Now with that being said, there may be lender overlays with a backend DTI of 56.99. Also, not sure where you live as FHA limits vary by metropolitan area. Also unsure of your down payment as this will make a difference as well. Rent verification is not always needed if you have a clean credit profile and good scores and have not moved a lot recently. Once again, lender overlays differ by state/city/loan type/company etc.

^^^ this

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Tue, 06 Oct 2015 21:16:46 GMT

Well talked to mortgage banker at my local credit union and it went quite well! They work with a lender that will close a loan with just 3% down as well as no PMI monthly. I also qualify for a $2500 grant for down payment assistance, although $1500 of it goes to the grantee for a fee or something of that nature so $1,000 towards DP. She said as long as I have $3,500 for DP in my savings I am golden, and that they can use my 401k and retirement account as my reserves.

Re: Maximum mortgage help! DallasLoanGuy or any bankers :)

cartwrna — Tue, 06 Oct 2015 21:17:42 GMT

As far as the Verizon collection account she believes it will need to be paid, although I'm going to try and close without paying it.