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240k+ income - how do i overcome this problem..

Posted on: 05th May, 2012 03:25 pm
Ok - my situation is a little strange.

Live in Southern CA - make approx. 240k-300k a year....don't have any assets other than my business and some 401k/ira (45k) - and don't have any debt's except for one pretty big one - 8300 a month alimony/prop settlement.

I pay rent of approx 2400 a month - looking at buying a house - as it would be my first house I assume I qualify for an FHA loan with 3.5% down? If I had to come up with money down I could probably do 75k without hurting things on my business end at all.

Looking at probably a 500k house.

However, when I look at the debt to income ratio it says Im around 53%.

As I don't have any other debts, seriously, none, no car payments, nothing - - just my alimony/prop settlement payment - am I still bound by the traditional 36-41% DTI from a lending perspective?

My debt is in the neighborhood of 750k over the next ten years, so it's not something I can easily knock off like a credit card bill or anything like that - but after my rent payment, I have 5 or 6k a month "flex" money.

Am I uniquely screwed?
Welcome Floodman,

Though you don't have any other debts, still the lenders will go by the traditional 36-41% DTI ratio. The lenders will want you to maintain this ratio in order to qualify for the loan. You should try to reduce your debts or increase your income in order to reduce your existing debt to income ratio.
Posted on: 06th May, 2012 08:32 pm
You will be held pretty much to an overall debt ratio of 45%

You do not have to count in the calculation of the debt ratio any debts that you can verify are paid by the business.

When you claculate the debt ratio are you using your self employed NET income (not gross income)

FHA mortgage limits are set by county. The standard limit is much lower than the $482,500 mortgage you are asking about, although, that amount is availbale in some high costs counties.

In what state and county would you be purchasing?
Posted on: 07th May, 2012 11:15 am
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