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## Need help figuring DTI

Hello
In underwriting right now and I am a nervousness wreck about underwriting. The LO said the only thing holding our loan back possibly would be going over the DTI cutoff with USDA guarenteed I believe 41%. We do not qualify for a waiver.
Husbands monthly income-3208
My income situation is different I am a commissioned hair stylist. Started in march of 2011. In 2011 I only made 12936. In 2012 I made 26936. So far through 2/16/2013 I have made 3985. From what I understand my income will be figured by adding all my yearly totals up and divide by 24. Which equals 1813

First- is this how my income is figured?
Second- what is my estimated DTI?
House payment will be 1267
Other payments equal 785

If my mAth is right our gross monthly is 5021

My husband can not include bonuses and I can not include tips so we actuall make about 20-25k more than this.

Thank you for any help
Message 1 of 19
18 REPLIES
Member

## Re: Need help figuring DTI

?
Message 2 of 19
Valued Contributor

## Re: Need help figuring DTI

I believe they will average your income from the last 2 years.

Doing the math, you are right at a 41 percent DTI. If you can't get the waiver, you might want to think about FHA.

Message 3 of 19
Contributor

## Re: Need help figuring DTI

For 2013: \$3,985 earned over 47 days equates to \$84.79 per day. So, for January and Feb you can be expected to gross \$5,002.61. That's 2 months of your 24,

For 2012: you earned \$26,936. That's another 12 months, for a total of 14 months.

For 2011, you earned \$12,936 over 12 months. That's \$1,078 per months, and you need 10 months, so \$10,780

So, deriving:

\$5,002.61 + \$26,936 + \$10,780 =  \$42,718.61 , divided by 24 months comes to \$1,779.94 per month on average.

\$1,779.92 plus your husband's \$3,208 comes to \$4,987.92

So,calculate DTI:

Mortgage payment of \$1,267 plus other payments of \$785 comes to \$2,052 per month.

\$2,052 divided by \$4,987.92 comes to 41.14 percent.

You need to find a way to get your other payments down, either pay something off or consolidate. Hopefully you are far enough out from closing that you can get an updated figure on ther other payments in front of your LO.

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Message 4 of 19
Super Contributor

## Re: Need help figuring DTI

Elcid nailed it.

Mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial Multifamily) since 2002
In Irvine, CA and lending in all 50 states

Information that is needed to determine if you qualify for a mortgage

shane@thebesthomeloans.com
Message 5 of 19
Member

## Re: Need help figuring DTI

Elcid in 2011 I only worked 10 months though. I started on march first. So would that start my 24 month clock??
Message 6 of 19
Valued Contributor

## Re: Need help figuring DTI

10 months of income in 2011 is already factored into the DTI calc Elcid did as you only needed 10 additional months from 2011 to get 24 months total.
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Message 7 of 19
Member

## Re: Need help figuring DTI

I made 12900 over ten months though not twelve.
Message 8 of 19
Member

## Re: Need help figuring DTI

I don't close till April 10th what options do I have to get under 41%? I have a car I could refi can I do that though in that amount of time?
Message 9 of 19
Valued Contributor

## Re: Need help figuring DTI

Ah I see so no need to reduce it. So your DTI is a little under 41%...40.4% to be exact.

Is all the \$785 of debt reported on your credit report?
Cards: Orchard Bank (\$1100) | Cap1 Cash Rewards (\$2500) | Chase Freedom (\$1000) | Best Buy (\$2500) | Discover It (\$1000) | Barclay Rewards (\$2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Last App: 4/5/13 Gardening until July 2014
Message 10 of 19