Financing in 91387>Question Details

Heidi, Home Buyer in Sylmar, CA

Brokers with high DTI ratios?

Asked by Heidi, Sylmar, CA Fri May 7, 2010

Need to refi to get ex off a loan. But am struggling with DTI problems not paying the loan as I have never been late and paying it by myself for awhile now. I keep gettting jerked around by some companies saying I would qualify and all of a sudden I don't. Anyway here are the basic specs, 298 on the loan, currently pay 1630 P&I...gross 3800 a month. Have nearly a 100K in liquid assets and a 790 credit score. The home has a little bit more than 5% equity currently in it just based off of recent sales.

Does anyone know a brokerage that has closer to a 50% DTI. I really also want to avoid having to pay PMI, high closing costs and avoid having impound account would be nice too.

Suggestions are appreciated!

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If anyone can it would be Mike Meena at Augusta Financial
Web Reference: http://www.mikemeena.com
0 votes Thank Flag Link Mon May 31, 2010
@ Robin Silverberg:

If the ex was removed off title, you can remove that person off the new du refi plus loan. Unless they changed DU on me AGAIN (I know the newest recent revision rules), it's completely doable.

95 LTV is possible folks...Fannie/Freddie's jsut gotta own your loan.


Cheers,


Lou
0 votes Thank Flag Link Mon May 10, 2010
Hi, Heidi

If you currently have only 5% equity in the home, then you don't have enough to do a 95 LTV loan. For most refis, your closing cost (depending on taxes and amount required to be escrow---for May it will be about 7 months) typically run between 3-5%. That said, if you truly want this home and wish to keep your monthly payment as low as possible, you'll need to put 20% down. This will insure you the best/lowest interest rate, eliminate the need for costly PMI or a LPI loan, and give you the best/lowest monthly payment.
If you plan on being in this home for more than five years and its in one of those desirable location that will see a significant (30-50%) return in market value once home prices start to recover (which some say can take up to another 3-5 years) putting 20% now may prove to be a wise and lucrative investment. But I don't have a crystal ball and know one can predict what the market will and won't due tomorrow let alone 3-5 years from. But if you truly love this home and its location and plan on staying regardless, then 20% is definitely the way to go.
0 votes Thank Flag Link Sat May 8, 2010
So, none of you guys do any Freddie loans? Except Wells Fargo, who uses LP and caps out at 45, you can get a conforming loan size if it gets approved by LP with a 50 back end. That being said, I don't think anyone would be able to get an LP accept with a 95LTV. On the DU refi plus, or Freddie's version of it, I believe you cannot take a person off the loan.
Heidi, who is your loan with now? Wells does have a program that can allow you higher LTV, where you don't have to document income, if the loan is Freddie owned, but I don't know enough about the program to tell you whether you can remove your ex's name.
0 votes Thank Flag Link Fri May 7, 2010
Let me add that one of my clients with a home in san diego is doing just that.
780 FICO, 97% LTV, 49.8% DTI, 330k loan amount, loan is currently owned by fannie mae

refi'd at 5% 30 year fixed
0 votes Thank Flag Link Fri May 7, 2010
Heidi,

The only way to do this is IF the property MORTGAGE is currently owned by fannie mae. If it is and you purchased the property without MI, then it's completely possible to get a 50% DTI with no PMI and no impounds.

Give me a call at 949-870-2882 and I can help you out.


Cheers,


Lou Wu
Chinatrust Bank USA
0 votes Thank Flag Link Fri May 7, 2010
You state that you have 5% equity but want to avoid PMI as well as an impound account. You also state that you have $100k in liquid assets.

First, Fannie Mae caps out the back end debt-to-income (DTI) ratio at 45% of your gross monthly income. Virtually no lender will approve it at 50%.

Second, the only way to accomplish that what you want to do is to pay down the mortgage. What you can do is be willing to pay off some of the current balance, refinance your current mortgage, and do a mortgage where the total monthly mortgage payment plus the monthly payments of your other debt obligations does not exceed 45% DTI ratio. The new mortgage balance must also be at or less than 80% loan-to-value (LTV) (must have at least 20% equity) to avoid PMI and avoid an impound account.

Alternatively, if able, you can do a DU Refi Plus program if you have a Fannie Mae or Freddie Mac loan. If you currently are not paying PMI, then you will not have PMI on the new loan. However, you're still faced with the DTI ratio issue and may still have to pay down the mortgage.

If you find that you will have to pay down the mortgage to a point where you will equity of 20% or more after you refinance, you're better off doing a conventional refinance as oppose to doing a DU Refi Plus as rates for DU Refi Plus loans are higher than for conventional loans.
0 votes Thank Flag Link Fri May 7, 2010
Hello Heidi,

Even with my recent client who had 825 Fico and $700k in liquid assets, the best any bank could do right now in this lending environment was 45% debt-to-income. I hope this helps you.
0 votes Thank Flag Link Fri May 7, 2010
I think you are looking for something that isn't going to happen. You want a high LTV loan, high DTI, and don't want to pay PMI, and pay little in closing costs. As you have said, you now have very little equity in the property. You also must have a very good rate. If I work out the principal on a $298,000 loan at 5%, it comes to $1599.73, so I am not sure what the point of refinancing is. Also, your DTI must be over 50 because you must have something in taxes and insurance. Also, you can't tell me you have absolutely 0 debt showing up on credit cards, because that would mean that you never use them.
0 votes Thank Flag Link Fri May 7, 2010
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