DTI is high, but any chance we could make it happen?

[LLee]

My DW and I moved to Texas last July and had to leave our home in NC to renters since the value was too low to sell vs what we owed (probably $40 grand upside down counting realtor fee's to sell it)...so we won't be able to count the rental income...plus, I changed career paths when we got here so thinking my income would be excluded as well...excellent credit for dw and I (750+ fico's on all three for both of us with nothing negative)...dw's income is just over $8,200 per month...mine is around $3,200 per month but, again, probably can't include it since my new job is nothing close to what I use to do...we pay $1,745 per month for the house in NC (never late or anything) and get most of that back in rent but know we can't count the rent as income for another year...also pay 575 for cars per month....no other debts....we've been renting a house here for $1500 a month but don't think that matters much other than it shows us it has been easily affordable...we have $10 grand for down payment and closing costs from our savings( have another $10 grand left in savings for cash reserves/emergency fund but not willing to use that up) and are looking at homes under $150,000...probably go fha (our home in nc is not fha)...had to move here for dw's employment which has been over 20 yrs with same company....

 

so, any chance we could meet lender DTI guidelines with just her income?

 

If so, could we qualify for up to $150,000 (tax and ins add about $350 per month here to the mortgage) or would we have to go a lot lower?

 

appreciate any help...online prequalification calculators vary too much to get accurate info...

[ColePatrol]

My DW and I moved to Texas last July and had to leave our home in NC to renters since the value was too low to sell vs what we owed (probably $40 grand upside down counting realtor fee's to sell it)...so we won't be able to count the rental income...plus, I changed career paths when we got here so thinking my income would be excluded as well...excellent credit for dw and I (750+ fico's on all three for both of us with nothing negative)...dw's income is just over $8,200 per month...mine is around $3,200 per month but, again, probably can't include it since my new job is nothing close to what I use to do...we pay $1,745 per month for the house in NC (never late or anything) and get most of that back in rent but know we can't count the rent as income for another year...also pay 575 for cars per month....no other debts....we've been renting a house here for $1500 a month but don't think that matters much other than it shows us it has been easily affordable...we have $10 grand for down payment and closing costs from our savings( have another $10 grand left in savings for cash reserves/emergency fund but not willing to use that up) and are looking at homes under $150,000...probably go fha (our home in nc is not fha)...had to move here for dw's employment which has been over 20 yrs with same company....

 

so, any chance we could meet lender DTI guidelines with just her income?

 

If so, could we qualify for up to $150,000 (tax and ins add about $350 per month here to the mortgage) or would we have to go a lot lower?

 

appreciate any help...online prequalification calculators vary too much to get accurate info...

 

My gross monthly income is about $3,500 and I'm in the process of purchasing a home for $162k (hopefully everything works out, offer accepted on Freddie Mac foreclosure ) with $2,315 in annual property tax. My monthly payments are $331 car and maybe $20 for balance on NFCU CC, so my DTI is pretty low.

 

My loan officer from Mortgage Network was originally the one who said I would be good @ $162k with no higher property tax than $3,100. I also have wifes income but she will not be included on the mortgage...

 

Hope this helps! Wish me luck

[jop3]

It actually sounds like your income is fine. Do you receive a W2? Was your last job W2? If you've been on that job since July, and you have no large gap in employment, there is no reason you can't use the income. You just have to have a 2 year work history. If your current job is newer and not the same industry as before, sometimes banks will have overlay guidelines that say you have to have anywhere from 30 days to 6 months on that new job, but I've never seen anyone not use the income when it's been over 6 months and the work history is solid and uninterrupted (meaning no long gaps).

[LLee]

thanks for the responses. I think our issue is my wifes income will have to support the dti ratios including the new mortgage, existing mortgage, and other debts which is just the car payments. I did change careers and I also voluntarily left my last job about 3 months before coming to texas just because I could and knew we were relocating so I took a "personal sabbatical" lol...further reason to believe my income won't be including in qualifying although I do plan to be on the mortgage if we are able to get a home. Otherwise we'll just postpone it till 2013...

[Brian B The Loan Professor]

thanks for the responses. I think our issue is my wifes income will have to support the dti ratios including the new mortgage, existing mortgage, and other debts which is just the car payments. I did change careers and I also voluntarily left my last job about 3 months before coming to texas just because I could and knew we were relocating so I took a "personal sabbatical" lol...further reason to believe my income won't be including in qualifying although I do plan to be on the mortgage if we are able to get a home. Otherwise we'll just postpone it till 2013...

Taxes vary a lot on TEXAS and are some of the highest in the country - try to find out the rate used in the area you will be buying. Just looking at rough numbers you are going to be close on just her income but will likely be ok - having your income as a compensating factor will not hurt even if it is not included.

B

[LLee]

Thanks Brian,

we have checked into the tax rates for the areas we would be looking and $350 per month should cover tax and insurance on a property in our area of interest. cutting it close on the dti though huh? thats kind of what we figured....

[Brian B The Loan Professor]

I think you will be fine

$2320 in previous obligations leaves a MAX of $1780 for new mortgage

with rates where they are you shouldnt be paying that much for a home in this range

however that is MAX of 50% ideally you want to 45% or less and I still think you would be fine. 45% would leave you $1370 for mortgage and taxes etc - you will be close to that - again showing your income will help your case not sure if they will count it or not but it is a compensating factor.

 

Good Luck

B

[DallasLoanGuy]

You look fine....

 

And you have some good compensating factors if the DTI is teetering close to the limit.

 

Compensating factors: Your income, and cash reserves.

 

I would apply with confidence

[LLee]

thanks for the responses. I think our issue is my wifes income will have to support the dti ratios including the new mortgage, existing mortgage, and other debts which is just the car payments. I did change careers and I also voluntarily left my last job about 3 months before coming to texas just because I could and knew we were relocating so I took a "personal sabbatical" lol...further reason to believe my income won't be including in qualifying although I do plan to be on the mortgage if we are able to get a home. Otherwise we'll just postpone it till 2013...

Taxes vary a lot on TEXAS and are some of the highest in the country - try to find out the rate used in the area you will be buying. Just looking at rough numbers you are going to be close on just her income but will likely be ok - having your income as a compensating factor will not hurt even if it is not included.

B

I am looking into refinancing our bigger car loan into my name alone removing her from the loan. It is 400 monthly and the payment would stay the same with no increase in the number of payments remaining so it makes sense if it would relieve my wife of this monthly obligation towards her dti. is this a good idea or would it not help?

[Brian B The Loan Professor]

Texas is a community property state so your debt will still count against her for DTI -

Her name doesnt have to be on the debt to count.

B

[LLee]

Texas is a community property state so your debt will still count against her for DTI -

Her name doesnt have to be on the debt to count.

B

thanks,,,,just saved me an inquiry anyways...