Dti question: keep getting different answers

[Anonymous]

I'm trying to find out how much mortgage I can qualify for. On the FHA calculator, it tells me I can get a home up to 250g. The other few I've tried are saying $170g.

My yearly income is about 45,000, and I have 0 debt.

We live in a high priced housing area, so I'm very concerned about only qualifying for $175g. 250g would give us a lot more flexibility.

Any help is appreciated!

[Bankrupt2019]

You likely won't be able to comfortably a $250k house, taxes and the accompanying payments on $45k a year. Unless of course you have a hefty down payment and very low living expenses. But its all subjective.

In my area $250k with $25k down 3.537% 30 year mortgage would be $2200/Month taxes and insurance included

[Anonymous]

It truly depends on the lender and how flexible they are regarding DTI ratios. The absolute maximum front end (housing) payment for a $45,000 salary would be $1725/mo, but that is pushing it to the absolute extreme (46% front end DTI).

It depends on your location (due to variances in taxes and insurance), but here that would buy you just under $260k worth of property. You may have a hard time finding a lender who will max you out on the front end, even with zero debt.

[Anonymous]

My fiancé contributes to expenses but due to credit can't be on the loan. Our combined income is closer to 75-80k, so the payment on a 250k home shouldn't stretch us too thin. We both have 10% wage increases coming in 2017 as well. I'm thinking we might have to wait until we can do the mortgage together if I can only qualify for 175.

[Anonymous]

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@Anonymous wrote:
My fiancé contributes to expenses but due to credit can't be on the loan. Our combined income is closer to 75-80k, so the payment on a 250k home shouldn't stretch us too thin. We both have 10% wage increases coming in 2017 as well. I'm thinking we might have to wait until we can do the mortgage together if I can only qualify for 175.

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That would be a compensating factor in your favor. I would sit down with a lender and see what numbers he/she can work up for you. Avoid the big banks, as they are generally much more conservative.

[Anonymous]

Just updating: I spoke with two lenders and both said they can approve us for up to 44% on the front end ratio, which puts us right at 250g. Thanks for the information!

[Anonymous]

You should get pre approve and ask the lender how much you can afford. That depends on the area where you live too. The property taxes in your area might be higher. Your home insurance, propterty tax and pmi will be included in your mortgage payment. You might be able to afford to buy a 200K house if your property tax is low.  I live in TN and property taxes here is so cheap. I'm in contract with a house I'm trying to buy and the property tax is only $690 a year and the home insurance here is pretty cheap too ($53 a month). 

[Skyzero12]

Take your minimum monthly payments from your credit report and add those up, now add up the price of the home you would want at the interest rate you want. So say 200k at 4.5%. You can find a calculator somewhere for that. Add in your pmi home insurance and taxes to the amount of the home. Now add mortgage payment plus your minimum debt payments divide that into your gross monthly income. If you have a good credit score then you may be able to have a 45% DTI depending on the loan. But generally you want to be between 35 and 45 on the back end. I can clarify more if you want.