Can't qualify due to high back end ratio of 64%

[Anonymous]

Hello,

I applied for an FHA loan for 420,000 (The cost of livin in NYC ). I was not approved due to my high back end ratio. My middle credit score dropped from 684 in 2/08 to 654 4/08. I want to buy a house by summer. Will reducing my debt in 2-3 months help me?

[ShanetheMortgageMan]

Depends on how much you are going to be reducing your debt by (in terms of monthly payments).  As soon as you have lower payments, you can use your new "debt load" to qualify with... you don't have to be at lower payments for a prolonged period of time or anything.  Would need more information in order to ascertain your situation though - such as income, monthly debt payments now, monthly payments after you reduce your debt - and also why your score dropped ~30 points in 2 months.

[Anonymous]

Thanks Shane

Here u go

Income- $60,000  + $40,000 from my contract work (I actually made 72,000 from my contract work but due to tax write off etc the number earned was 40,000.

Debt

Installment loans

90,000 student loan-389 month

36,000 car loan (I  am a co-signer for my hubby)- 672. month

13,0000 consolidation loan 379.00 monthly

Revloving debt

total 14,0000(5 credit cards)- total monthly payments approximatley 540.00

(i plan to pay off all of my revolving debt but was told that it would not help  me.

Thanks in advance

deb

[chartley3]

Deb,

I think what is hurting you is the student loan amount. I would focus on paying that down and then looki to reconsolidate into a lower monthly payment. That should help your back end ratio.