Hoping someone can shed some light. I'm concerned my DTI won't quite cut it for a FHA loan approval, especially since my mortgage scores aren't glamorous. I also want to utilize a DPA program. Here's my information:
Mortgage Scores (FICO 5, 4 and 2, respectively):
Income: $68,000/year gross
Employed full-time (W-2 wages). Same employer for 3 years, same line of work for 8 years
Auto Loan: $385/month, $11,200 remaining balance
Credit cards: 6 total, available credit $6,700, current balance $4,985. No late payments. Most recent card older than 12 months, oldest card 4 years. Minimum payments $200/month
Student loans: $58,000 total balance. Monthly payments $440/month. Last late payments reported in 2013 (over 60 days)
IRS debt: $219/month (no lien, installment agreement)
State tax debt: $200/month (no lien, installment agreement)
I'm a little nervous about my student loans. I've read that for FHA loans they will use 1% of the outstanding balance which will impact my DTI. Am I out of luck here? Any input/thoughts would be much appreciated!
Based on your scenario, it would appear that you should be able to purchase a home approximately $185K give or take depending on the tax rate for your particular county. Many of my DPA Programs have DTI restrictions, but keeping the DTI under 50%, this should be close.
As far as the student loans, as long as you are on a repayment schedule that is fully amortized, then you are good to go. If your SL's are not fully amortized, call and place yourself on the longest term available. Even at 1% you should okay as long as your Real Estate Taxes aren't above too high. If the tax rate is high in your area, you would need to lower the sales price a bit or pay down some debt. But an experienced Loan Officer can work you through this process.
Hope this helps. Best wishes to you!
Phew, thank you so much! That really puts my mind at ease. I'm ultimately looking for a home priced at no more than $160k, so hopefully that shouldn't be an issue.
Thanks again for your input - I really appreciate it! Have a great weekend.