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Mortgage modification debt ratio

what is the ideal income for debt ratio to qualify for a loan modification? i have 3 loans (3properties), indy mac, wells fargo, and country wide.

savior70's picture
savior70 | Joined: March 25, 2009 05:14 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi

A 36% debt to income ratio is said to be the ideal ratio to quallify for a loan. Under the new modification plan, the front end DTI for the first mortgage should be brought down to less than 38%. I think to qualify for mortgage modification, debt ratio of 42-45% is required.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 01:36 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I give 42% of my gross monthly income to pay my mortgage. Does that ratio qualify for loan modification?

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 01:36 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

In my opinion you will be able to qualify for a loan.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 01:36 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

To calculate your mortgage modification debt ratio, you need to use the following formula: (Mortgage Payment + Taxes + Homeowners Insurance) ÷ Gross Income. If your mortgage modification debt ratio is above 45%, then you've a high chance of getting a loan modification.

However, if you've no income or very little income, then your mortgage modification debt ratio will be very high. Thus, the lender would try to foreclose the property. But you should also know that the guidelines for the DTI ratio may vary from bank to bank but it should be between 31% and 45%.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

it's interesting - i don't do anything with modifications, so i'm unaware; but i've never seen any calculations used such as described here.

frankly, what i see here is quite confusing. some answers describe ratios that are needed to qualify for a new loan, while others describe what the "modification ratio" needs to be. then again, i see one that talks about both sorts of scenarios in pretty much the same breath.

no wonder the average consumer is clueless about where to go. then again, many of those average consumers are on this forum telling others what they think they know. it's a quandary.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 01:36 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have two loans through wellsfargo. They total to be 51% of my income. I am seeking a modification for only my first loan which is 37% of my income. What are the chances that I will be qualified for a mod? I am a little confused about what the tipping point is that the bank decides to foreclose on you rather than modify your loan.

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi buckness,

You will have to apply for a loan modification with your lender. You will have to explain why you need a loan modification. If the lender is convinced about your hardship, then he would agree to your loan modification. Apart from the normal loan modification, you can even apply for the Home Affordable Loan Modification as initiated by the Obama Government. This may even help you in reducing your interest rate to as low as 2%.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

my mortgate debt to income ratio comes out to be around 27%, however we still struggle and had to file bankruptcy. is there a chance i would qualify for such?

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 01:36 | Post subject:

riseabove's picture
riseabove | Joined: November 9, 2009 12:58 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

So with a loan mod, your interest rate is reduced (to what - the current variable rate?) and any overdue payments you've missed are added to the principal - effectively like a new loan is taken out.

Are there any break fees associated with a mod? It sounds pretty similar to a [url=http://www.mortgagefit.com/refinance.html]refinance[/url] to more favourable terms, but with less strict acceptance criteria.

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

To anonymous,

A query similar to yours has been replied to in the given page:
http://www.mortgagefit.com/problems/modification-highdti.html

Take a look at it. I hope it will help you.

Hi riseabove,

The lender will change the terms and conditions of loan depending upon the borrower's financial situation. You are correct that the overdue payments are added to the principal amount. Fees are associated with modification but it may vary from lender to lender.

Thanks

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