DTI question

[ToddP]

I'm trying to finance an RV to serve as my primary residence. I'm active duty military and I get $1200/month for housing allowance. I'm tired of wasting money by just giving it away to a landlord for rent. So my plan is to move into an RV and use my housing allowance to make the payments. I applied the other day and was denied. The loan officer advised that I pay down my credit cards and then I shouldn't have a problem getting the loan. I already knew my utl was too high (70% due to just moving from overseas) He said get it under 50% and he could work with it. But ofcourse I'm shooting for 10% utl.

 

I'm more worried about my DTI ratio.

 

I make 60k / year

I have 10k credit card debt (will be payed down before I app again)

I have 22k in installment loans (sig & car loan)

 

Am I close to some magical DTI line?

 

Thanks!

[BobWang]

I'm simple-minded, so the figures I carry in my head are:

 

no more than 25% of gross income for a mortgage &

 

no more than 1/3 of gross income for all debt obligations.

 

Just a cursory search turned up these guidelines:

 

http://budgeting.the...oans-20363.html

[ToddP]

Thanks for the link. I forgot to add, the RV would be financed at 60k for 180 months, giving me a monthly payment of around $600-$800. I would double up on the payments with the $1200 allowance to pay it off in about 7 years.

[BobWang]

May I suggest using an Equifax inquiry to join Digital Federal CU?

 

That inquiry can be made to go away, but it will give you a free Equifax FICO every month.

 

At a 600 FICO, you'll going to need all the help you can get.

 

So, I'd also go ahead and ask for CLIs from NFCU and USAA.

 

Those inquiries can also be made to disappear.

 

*IF* PenFed offers you a pre-approval, grab it.

[ToddP]

When asking for CLIs, should I only ask for what I think they will approve or should I shoot for the moon? With NFCU, my CL was 3k and I asked for 5k. It went to manual review and was approved about 2 months ago.

 

Also, do I have to ask for USAA CLI or are they on an automated system?

[BobWang]

When asking for CLIs, should I only ask for what I think they will approve or should I shoot for the moon? With NFCU, my CL was 3k and I asked for 5k. It went to manual review and was approved about 2 months ago.

 

Also, do I have to ask for USAA CLI or are they on an automated system?

With a 60k active-duty income, especially if it's direct deposited to Navy, I'd ask for $25k.

 

Same with USAA.

 

Shoot for the moon, being active has its bennies.

[ToddP]

Ok. As always, thanks for the info BW