Would I qualify for 180000 loan?

Anonymous · ‎07-26-2017

Hey guys, I'm planning buying a house next spring 2018, here's the overall situation, any answers and opinions would be appreciated and helpful! Never owned a property before, wan to buy it as primary residence.

Credit score: 755, oldest account 2.5 years, 6 cc total credit line 18.600. never been late on payments, don't owe anything.
Have two jobs: One full-time which is 20000 a year, other is part-time working as a valet, making 30000 a year, but I do not claim all the tips I make only 30% claimed, so by the end of the year i expect around 14000 income from this job, total would be around 34000. Employed at fulltime 5 months, parttime almost 3 years, still waiting on March 2018 to make it a year full-time position experience.
Married, but want to get the mortgage on my own.
Debts: 272 a month car loan making 650 payment every month to pay it off in 2 years.(July 2019 approximately), no other debts, bought the car 3 months ago, 15200 owed principle.

Rentals and bills: been renting from rental companies 3 different places in last 3 years never late on payments good tenant, bills always paid on time
Have 50k as a down payment, want to get the house for 30 years.
Would I qualify for 230k house with 50k down payment in this situation?

Surge89 · ‎07-27-2017

For 180k and no mortgage insurance (down payment is more than 20%), your mortgage payment will be around $1300 depending on taxes which puts your backend DTI at (with the 272/mo pmt) around 55%. Given that your monthly income is 34000/12 = 2833 and your total expenses would be (1300+27). 1572/2833 = 55.5% DTI.

Conventional will start allowing up to 50% DTI so you still don't qualify. For an FHA loan as you have the great credit score to compensate for the higher DTI (limit would be 56 or 57%), but the downside is that you have upfront mortgage insurance which would be around 4,000 added to your principle, plus the monthly mortgage insurance premium of around 130 a month making your total payment around $1400/month + 272 car = 1672/2833 = 59% DTI which would make you ineligible.

There are three main options: Bring your house budget down to 200,000 so you can qualify for Conventional for a house payment around 1150/mo, or to 210,000 to qualify for FHA with a payment around $1,270 OR pay off your car from the 50k with 35k down payment left, and apply for FHA for mortgage payment of around 1,550/mo under 55% DTI.

OR a combination of those things + getting a raise at the full time. For FHA however, they will want 2 year job history to qualify the income so your full time of 5 months may be a problem (even in spring 2018 it'll be 1 year).

Conventional will be your best friend so I vote for bringing home budget down.

reckedhim · ‎07-27-2017

Way to be a cheat and not report all of your income.

Anonymous · ‎07-27-2017

most tipped positions do not report full income. It can be very hurtful in the same way that business owners who write everything off feel pay when trying to qualify for things that require IRS proof of income.

The best advice at this point for qualification is to report all income and get that W2 to help you out. If you don't claim it, it isn't income.

NC_Mtg_Loaner · ‎07-27-2017

Some lenders may only allow one source of income for qualification purposes too, since you don't have 2 year history of working 2 jobs at the same time, so you might want to look into that as well with any 'potential lenders'.

__________________________________________________

Licensed NC Mortgage Loan Originator

Anonymous · ‎07-27-2017

FHA does require 2 years of job history, but it is not required that job history be full-time. Every lender is going to have their own overlays on this, but your current job history will suffice with the right lender. Your job history will be fine, the bigger concern will be that your part time income can be averaged out over the last two years to show at least $14000. The mortgage insurance would work out to be about $115 because you will get a slight break because you are putting more than than 5% down. When you are ready to buy you will want to make sure that you work with a lender is specializes in FHA loans. All lenders can do them, but not all understand the various intracacies of the program and often times can 45 days or longer to close them.

National Mortgage Officer

kc0039 · ‎07-27-2017

@Anonymous wrote:
Hey guys, I'm planning buying a house next spring 2018, here's the overall situation, any answers and opinions would be appreciated and helpful! Never owned a property before, wan to buy it as primary residence.

Credit score: 755, oldest account 2.5 years, 6 cc total credit line 18.600. never been late on payments, don't owe anything.
Have two jobs: One full-time which is 20000 a year, other is part-time working as a valet, making 30000 a year, but I do not claim all the tips I make only 30% claimed, so by the end of the year i expect around 14000 income from this job, total would be around 34000. Employed at fulltime 5 months, parttime almost 3 years, still waiting on March 2018 to make it a year full-time position experience.
Married, but want to get the mortgage on my own.
Debts: 272 a month car loan making 650 payment every month to pay it off in 2 years.(July 2019 approximately), no other debts, bought the car 3 months ago, 15200 owed principle.

Rentals and bills: been renting from rental companies 3 different places in last 3 years never late on payments good tenant, bills always paid on time
Have 50k as a down payment, want to get the house for 30 years.
Would I qualify for 230k house with 50k down payment in this situation?

FHA requires 2 years uninterrupted if we were to get income from two jobs. Conventional requires 2 years consecutively. This is the bare minimum without overlays rule for both programs.

Licensed in IL

StartingOver10 · ‎07-27-2017

@Anonymous wrote:
most tipped positions do not report full income. It can be very hurtful in the same way that business owners who write everything off feel pay when trying to qualify for things that require IRS proof of income.

The best advice at this point for qualification is to report all income and get that W2 to help you out. If you don't claim it, it isn't income.

^^This is true. It's also possible all of the part time income will be dissallowed because he hasn't had the job two years. Is your P/T employment W-2 type or 1099?

OP, if you put down a 10% of the purchase price or more that has the advantage of being a compensating factor for you (which is a good thing for u/w) and the advantage of getting your MIP dropped after 11 years. Normally the MIP stays for the life of the loan. The exception is if the buyer/borrower puts down 10% or more then the MIP drops off after 11 years. That's another positive thing for you.