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stogge · Joined: 02 Feb 2010 Posts: 4 2.06 Dollars($)

Hello All...

I am new to the forums, and I have a few questions... First, I have been working with a lender and we worked through the whole pre-qualification process, and she said that I would be approved to up to 200k for an FHA loan... That was all fine, and the search continued, until I came across all of these debt to income ratio numbers that I was failing across the board...

My situation is as follows:
-43k Income
-259/MO Car Note only recurring debt
-Credit Scores of 750,696, & 686 with no late payment records ever...

So by my calculations:
-200k plus extras around $1300 here in Raleigh
- Ratios = 36% Front Ratio & 43% Back Ratio (House+Car?)

Is this something that could be done?

adonis · Posted: Tue Feb 02, 2010 8:36 pm Post subject:

Welcome Stogge,

As far as I know, the debt to income ratio required to get a FHA loan is 31/43. If you are unable to meet the requirement, there is a high chance that you won't be able to qualify for a FHA loan.

stogge · Joined: 02 Feb 2010 Posts: 4 2.06 Dollars($)

Thanks for the reply, but would any other mortgage professionals like to comment on this?

tfaulhaber1 · Posted: Wed Feb 03, 2010 8:24 am Post subject:

It that's your DTI, you should be fine. 50% is usually the break point on a back end ratio. I surprised they won't approve your loan. Is there anything your not telling us? It's seems to be a vanilla deal.

Posted: Wed Feb 03, 2010 8:28 am Post subject:

No, there are no hiddens here, but my front end ratio is >20% over the FHA stated maximums... Thats why I'm concerned...

tfaulhaber1 · Posted: Wed Feb 03, 2010 8:58 am Post subject:

Try one of the loan officer's on the forum. I don't see how you can't get approved. I think many of us on this forum would be pretty happy to have a loan scenario like that!

Posted: Thu Feb 04, 2010 7:37 am Post subject:

Thanks for the info. Also, the standard documents that I have been reading include 2 months bank statements, as a Mortgage consultant yourself, what kinds of things do you look for on these? I spent the last couple of months paying off all of my credit card debt, so what would that look like to you if you were reviewing?

tfaulhaber1 · Posted: Thu Feb 04, 2010 8:17 am Post subject:

W2's, Pay Stubs, Bank Statements, ID, SS Card, Letter's of explanation for any derogatory credit etc, etc..

gmakerley · Posted: Thu Feb 04, 2010 9:41 am Post subject:

virtually every loan these days is underwritten using automated underwriting (du, for instance). automated underwriting takes into account all the relevant factors (income, assets, credit, property value, etc.) and is most forgiving on ratios when someone has a very good credit score. in this particular case, i don't believe that 36/43 ratios are going to give you any difficulty in qualifying, assuming all the other pieces fit.

as for what is looked for, for example, in bank statements: what will stick out is if you have any large deposits for which you cannot provide an explanation. if anyone sees anything that might be construed as funky, they'll ask for an explanation. if your explanation makes sense and if you can provide any documentation that they might request, then you'll fly through.

and if your lender of choice has already told you that you're prequalified, you can pretty much count on that unless some of the information you provided to her is incorrect or unverifiable, or if you fail to provide in some way the documentation the lender needs.

bg0427 · Posted: Thu Feb 04, 2010 1:08 pm Post subject:

Like the other guys said as long as you recieve an automated approval you will be good to go. With your DTI I can assure you that you will get approved. I got one approved this week at 51% on the back end which surprised me bigtime but you have compensating factors like your credit to back you up.

jveenstra · Posted: Thu Feb 04, 2010 1:44 pm Post subject: FHA

Lenders can run your automated underwriting approval thorugh DU (which is Fannie Mae) or LP (which is Freddie Mac)

LP (Freddie Mac) presently allows igher debt ratios than DU (Fannie Mae)

Debt ratios of 36/43 should be ok with either one.

stogge · Joined: 02 Feb 2010 Posts: 4 2.06 Dollars($)

You guys Rock! Thanks for all of your input, and I assume if anything goes "awry" with my lender, that I would have you guys willing to help!

Thanks All!!

bg0427 · Posted: Fri Feb 05, 2010 7:50 am Post subject:

You bet! Good Luck with everything.

gmakerley · Posted: Sat Feb 06, 2010 8:59 am Post subject:

we always strive to be of assistance, so keep us posted if needed.

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FHA Loan Question- First Time Homebuyer- 43k