My advice is take things step by step. Your debt to income ratio to purchase a new home is your primary issue. VA loan won't help you because of your debt to income ratio. However, if you rent your current home sometimes you can count towards your debt to income ratio and it cancels out your mortgage. Then maybe you can use the VA loan that is no money down, no pmi - good deal. Rate is a little higher, usually, but rates are so low anyway, may still work.
Ask around to some lenders. Sometimes if you have a section 8 housing voucher holder rent your property, since the income is guaranteed, some lenders will count towards dti without rental history.
If you can do this and want to do this, then I would suggest you talk to some professionals to help you with both the rental and purchase. Some of my clients have one partner take the lead if there are scheduling conflicts. Good luck.... more
Sure you can, if you qualify for the loan and are going to live in the house. I think the funding fee increases to 3.3% . But even that is not a big deal with rates as low as they are today, good luck,
NMLS # 6395
Financing Kentucky One Home at a Time... more
Primary Residential Mortgage Inc. has this product as does Wells Fargo. I dont know Wells' guides but here is our guides for our FHA product. I dont lend in IL but you can try an office in your state.
The borrowerâ€™s must have a 500 FICO score.
Ficos between 500-579 require a 10% down payment
No cash out loans or streamlines. Purchase and rate and Term refinances only.
Minimum Loan amount $50,000
Maximum loan amount is $417,000 or the conventional FHA loan limits for your county if lower.
Approved FHA Direct Endorsement Underwriter â€“ I have one in my office.
Collections allowed up to $5000 for Fico scores above 620.
Collections are not allowed for Fico scores below 620. Exceptions for medical.
2 months reserves. If using retirement funds 6 months reserves required.
No gift funds allowed with LTVâ€™s above 85%.
12 months on the job instead of minimum 6 months.
29% Front End DTI ( Housing ) and 41% Back End ( Total Debt )- Currently maximum with 640 Fico is 47% Front End DTI and 57% Back End DTI.
Borrowers must have health insurance for all household members including kids.
No gift funds for loans above 85% Loan to Value.
12 month Verification of Rent or Mortgage.
Interest rates are about .25 higher than an FHA loan priced out with a 640 fico score... more