I'm looking to purchase a new home within the next year. I have to keep my current house until I purchase a new one (I have many pets and can't move into an apartment, relatives, etc)
No credit card debt, no auto loans - only my current mortgage payment of $1,390 a month. I'm looking at a roughly $420K house with 10% down, so roughly a loan of $380K. That being said, my current lender wants a DTI of no more than 45% which would total $3,873 per month by their guidelines. The combined DTI of a new mortgage and my current mortgage would put me at $4,290 or 48.5%. Houses have been selling really fast in my area, so I don't anticipate that I will have the current mortgage for more than a couple of months (average sale time in my area is 1 month). So after I sell my house I will be well within the 45% DTI ratio.
That all being said, this is with my income only. With my wife's income we would easily hit the DTI, but her credit score is much lower than mine. Hers is currently 704 and mine is 788. I would certainly like to take advantage of the lower rates and PMI from my credit score, but the lenders tell me they will go by her score if we apply jointly. Is a 48.5% DTI feasible for a conventional loan in our current market? After I sell my house my DTI for my income will be 33%.
Thanks!
Brian
