topic UDSA Wisconsin Question in Mortgage Loans

UDSA Wisconsin Question

Anonymous — Tue, 17 Mar 2009 17:43:07 GMT

Hello,

My wife and I hope to buy a home some time this summer or fall. She is a full time student with probably 2 semesters of school left and 1 semester of student teaching then. I graduated in early 2008, and work full time for the university in the technology arena. My question at the moment is, in Wisconsin, can I apply for a USDA or FHA loan on my own, or will her student loans have to be counted towards our DTI. Hers are siginificant and she only works a few hours a week, and the focus is on getting done with school. I think once I pay off my Prosper installment loan my DTI would be fine with my income but if her deferred student loans have to be counted too, I am not sure it will be possible, based on everything I have read here and other places. Thanks! Lots of good info here.

Re: UDSA Wisconsin Question

valley_man0505 — Tue, 17 Mar 2009 20:22:31 GMT

I THINK you can apply in just your name (I am really not sure, though). However, if this is your first house, you should also consider how this would affect the tax rebate. I don't think you could claim the entire rebate unless both of you were on the loan.

Re: UDSA Wisconsin Question

Anonymous — Tue, 17 Mar 2009 20:30:46 GMT

We file our taxes jointly...IRS Form 5405 seems to indicate that it is halved only if you are married filing separately.

Re: UDSA Wisconsin Question

Anonymous — Tue, 17 Mar 2009 20:45:28 GMT

It's a good question, and hopefully someone will be along with a knowledgable answer. In most states as long as you were applying on your own, her debts would not be an issue. Wisconsin however is a community property state they might be considered.

It doesn't matter for the rebate.

Re: UDSA Wisconsin Question

Anonymous — Tue, 17 Mar 2009 20:51:29 GMT

I am sory to say but in a community state (I am in Texas also a community state) Her debt will be considered. Double check to be 100% but I am about 99.9% sure of this.

Re: UDSA Wisconsin Question

ShanetheMortgageMan — Tue, 17 Mar 2009 21:59:29 GMT

USDA always counts deferred student loan payments in the debt ratio now, and does abide by the community property laws that VA & FHA go by, so your wife's student loan payments would be included in your DTI. However FHA does not include deferred student loans in the debt ratio (if deferred for 12 months from the closing date), so if you had the 3.5% down payment, then it appears that could be a good alternative at this point.

Message Edited by ShanetheMortgageMan on 03-17-2009 02:59 PM

Re: UDSA Wisconsin Question

Anonymous — Tue, 17 Mar 2009 22:06:02 GMT

Thanks for the reply Shane. What is the max back end ratio for FHA? 41%?

Re: UDSA Wisconsin Question

ShanetheMortgageMan — Tue, 17 Mar 2009 22:10:49 GMT

For a manual underwrite it's 43%, but I've seen automated underwriting approve as high as 59%.

Re: UDSA Wisconsin Question

Anonymous — Tue, 17 Mar 2009 22:13:19 GMT

Yikes, 59% just sounds dangerous. My Equifax FICO is 702, and CreditKarma estimates me at 692. I haven't run TransUnion yet, and my understanding is there is no way to get a FICO from Experian now. I've never had any late payments, or anything else negative.

Re: UDSA Wisconsin Question

ShanetheMortgageMan — Tue, 17 Mar 2009 22:15:09 GMT

Well your credit appears fine then, without any liquid reserves leftover I'd still say a 45-48% debt ratio should be OK through automated underwriting... if you have some reserves leftover then into the 50's.

Re: UDSA Wisconsin Question

Anonymous — Tue, 17 Mar 2009 22:18:10 GMT

One other question at the moment...is it true if you have an installment loan with 6 or less payments left that it isn't counted against your DTI?

Re: UDSA Wisconsin Question

ShanetheMortgageMan — Tue, 17 Mar 2009 22:32:57 GMT

Directly from an underwriter - For a Rural loan,they only allow debts to be excluded if there are less than 6 payments, not 10.

Re: UDSA Wisconsin Question

WannaHouse — Wed, 18 Mar 2009 01:10:39 GMT

I am in WI as well. We are pre-approved for both USDA and FHA. I also wanted to let you know that WI does have some county and city programs that might be able to help with down payments and/or closing costs if you qualify.

Here is the link for the Dane County program:

http://www.dcha.net/homebuyer-assistance-program.php

I think for most counties, you can just search for down payment assistance in ----- county.

Hope that helps and good luck!

Re: UDSA Wisconsin Question

Anonymous — Wed, 18 Mar 2009 01:31:58 GMT

We are in WI too. Just got more information on the USDA loan this week. We went to the bank on Monday and were told that our student loans are included, but since there is no payment listed, they calculated their own at 8% over 10 years-which made the payments very high. We went from a 10% DTI to 46%. We decided to wait. My scores average the 660 needed, but my husbands avg is 615. So we will work on getting those scores up and keep moving forward. Our discharge date is 9/06 so even without the 660, we should be good to go this Sept. Just keep trying to keep proessing along.

Re: UDSA Wisconsin Question

ShanetheMortgageMan — Wed, 18 Mar 2009 02:26:03 GMT

2Ds2Cs, you might want to inquire with your student loan lender to give you an estimated payment based on today's interest rates and see if the lender will use that instead of the 8% over 10 year payment.

Re: UDSA Wisconsin Question

Anonymous — Wed, 18 Mar 2009 02:35:12 GMT

Thanks for the the advice Shane. We will have to look into that. One payment was calculated at $487, but the true payment is $256 (we know that because it is my husband's undergraduate loans which we have been paying on for quite some time). Just reducing that would put our DTI to 40%. Problem is my scores are 660, husbands are 620 so I am not sure if we could get the loan either way.

Re: UDSA Wisconsin Question

ShanetheMortgageMan — Wed, 18 Mar 2009 02:36:39 GMT

So you are paying the $256 now but it doesn't actually report a payment? Then providing a statement showing the $256 amount due would be all that is needed.

Re: UDSA Wisconsin Question

Anonymous — Wed, 18 Mar 2009 02:39:20 GMT

We were making that payment, but hubby just started school in Jan for his masters so it is deferred.

Re: UDSA Wisconsin Question

Anonymous — Wed, 18 Mar 2009 02:50:58 GMT

Thanks for the information Wisconsin folks...although the information on the student loans doesn't look like it bodes well for us...will just keep paying stuff down and talk to a broker in a few months see what chance there is...River Home Lending seems to be popular in this area.

Re: UDSA Wisconsin Question

ShanetheMortgageMan — Wed, 18 Mar 2009 03:14:34 GMT

@Anonymous wrote:
We were making that payment, but hubby just started school in Jan for his masters so it is deferred.

Do you have a statement from when the payment was due? Has the balance changed (increased) since then?