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Hi all, I have some numbers I want to share to see if I can get some feedback. I posted earlier that in May I approved for mortgage, and since then I have a 30 day late report for a credit card. I am contacting the company with a goodwill letter to see if they will remove it, but if not, I don't know if I can qualify. My house in on the market. I have a house I'd like to buy. The house is listed at 319. I will have 20% down payment. According to my LO, here are the numbers for me today. He said that the numbers beside the + show that if I pay down my credit card debt, I will qualfy. XP is 580 + 46 TU is 605 + 36 EF is 590 + 47 If my house sells I can pay off all cc debt. In the meantime I can pay it off in two payments. I'm really worried about loan going through and looking for advice.

I am using calculators online. On my rent/mortgage I have a roommate so do I put in what the full amount of the rent is or do I put in the portion that I pay? How do banks look at DTI when the person has a roommate but lease doesn't really say one person pays half and the other person pays half it just lists the full amount of the rent? If I put in half of the rent (which is the portion I pay) It has my DTI at 17% but if I put the full amount of rent it bumps my DTI up to 31% so just wondering how banks and other financial organizations look at this? Thanks

I was just pre-approved for an FHA mortgage (mid score 675), and hope to find a good house within the next month or so. Because my DTI is a bit high right now, I was only pre-approved for a $200,000 loan with 3.5% ($7000). I have been looking at some great houses, but most are just above the approval level. I have up to $30,000 in reserves to put as a down payment, but I also have about $9000 in credit card debt (I had some recent family medical emergencies that added up quickly). So my question is this: Does it make more sense to lower my DTI by paying down the credit cards with the reserve money, and put a smaller amount toward the down payment, or keep a larger down payment? Thanks in advance for the advice! ** BTW- I am about 2 years post-BK7 discharge, so FHA is my only option at this point.

I understand that to optimize one's credit score is to be aware of various ratios: the number of credit cards I have the total amount of credit available to me the % of that credit I have utilized (debt to income ratio) My income also plays a role but that's not something I can adjust as easily as the above (!) I understand that other sources of debt (mortgage, car payment, etc) play into some of this. SO, at a given income, is there a magic combination of ratios for the above that will make potential creditors the happiest? Thanks, Steve

Hello all, I have a question that hopefully someone here can answer. I have a mortgage pre-approval (and am scheduled to close December 26th), but my ratios are really tight. I know I can't let anything new report balances on my credit report, and have been trying really hard to pay my cards off before the statement cuts...but I missed two. They were small balances, but they would be adding about $65 in monthly payments to my numbers, which I believe could skew my ratios just enough to get me in trouble. The two cards that reported were Merrick and WalMart. Do you think, since I have since paid them off, that I could call each of them and request that they update the balance before my next statement date? Has anyone done that? A rapid rescore would not apply here, would it, since they will not have reported the new $0 balances? The statement dates are the 27th and 28th, which is too late-- I don't want this messing up my mortgage!

I know we've discussed DTI quite a bit, the norms and the exceptions, but I'm not sure if this was discussed previously... The LO mentioned that DTI could exceed 45% but that <=45% was required in order for them to obtain PMI on the loan. This was for conventional with <20% down, obviously.

I have been curious lately how far lenders will go these days to approve a mortgage. It seems like they have tightened up lending based on what I read, but I wanted to share with everyone a case where a mortgage was approved and I truley did not think it would have been or should have been. This was not for me, but someone close to me and although I tried to talk some sense into her, you know how we can be when we want something- it doesn't matter at what cost or if it is wise. Here are the facts: Good credit score >720 2nd home purchase, 1st home is currently a month to month rental with maybe $15k equity- rental income was not used to qualify. Purchase price of new home $270,000 3.5% down, FHA loan Seller paid closing costs. DTI- 55% This person has a good job with longeveity and makes ~$90k per year. What gets me, is the DTI and what she had to do to get that DTI. I think a responsible underwriter would have not approved this loan, but maybe they don't see what I see and maybe in the end they just don't care. A year ago, she took out an unsecured loan for $30k to pay off a $20k credit card that she was over the limit on. She also had another credit card that was close to being maxed out at $20k. She paid off the 1st credit card and spent the remaining $10k of the insecured loan. She then proceeded to put another $10k on the credit card she just took a loan to pay off. So instead of reducing her debt as planned, she increased her debt by $20k. She decided to buy this 2nd home. To qualify at a 55% back end ratio, she had to pay off her credit cards. To do this, she took out a 5 year 401k loan of $42k which is half of her 401k. She paid off $30k in credit cards and used the remaining towards her down payment etc... Her payments back to herself with be roughly $750 per month for the next 5 years which is not calculated into the DTI. To close, she had to show proof that she closed the credit card accounts. She had already started charging on one of them (within 1 week of paying them off). When she called the credit card companies, she made sure she would be able to reopen the accounts once she closed on the house- which of course they assured her "yes", she can repopen her credit cards. She closed the accounts, provided her proof, closed on the house and has reopened her credit cards of $40k credit line. Obviously, the underwriter could see she had an issue with credit cards, but the condition she imposed was merely for show to make it look like she had been a responsible underwriter and reduced the risk on the loan. I have helped this person with her budget a year ago when she was drowning in debt and every bite she took was on credit. Just one month ago, she bounced a couple of checks, one of which was for $1000 for her rent! How could she get approved for an $1800 per month mortgage when she doesn't have the money to cover $1000 in rent? I know they looked at her bank statements- I thought they wanted to see that people can manage their money? I know lenders do not look at other things such as utilities, auto insurance and gas etc... which is great for some, but they have approved a loan that will give her $600 a month left per month to pay every monthly expense that does not show up on a credit report. And when her month to month renters finally move out, she will be negative $800 every month until she rents it again. Just as her history shows, her credit cards will absorb her cost of living until she reaches the limit again- then what? I guess with good income, a good credit score, and a 401k of $40k as reserves, you can get a mortgage with FHA up to 55%.

What kind of DTI ratios should we expect for Conventional and FHA financing? The old percentages I had seem to be lower than what I found on various sites.