Home Buying in 68116>Question Details

NE_FTHB, Home Buyer in 68116

High DTI - We have been preapproved, but are waiting on the underwriters

Asked by NE_FTHB, 68116 Wed Jan 8, 2014

Hello,

We have recently been preapproved for a property that we want to buy at 100k. Our gross monthly income is 8,279 however our current debts around around 2,400 per month. The lender has suggested a conventional loan at 5% down, making our mortgage payment (with HOA fees tax insurance PMI) right about 900 per month. We both have good credit scores - 793 and 748. We have cash reserves of about 17k which will go towards our down payment, and about 2.5k in closing costs (seller to pay the rest). I have read numerous articles with different DTI limits and am hoping that someone can provide some insight on whether the approx 40% DTI might cause an issue in underwriting.

Thank you!

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Answers

6
It does not sound like that should be an issue. Sometimes it just takes a few days for the underwriters to get their part done. If you have any questions I would be happy to chat with you.

Did your loan officer already tell you if the DTI worked in automated underwriting? That should not be an issue if your file is already in underwriting normally.

Debra Dodge ddodge@natresdirect.com 402-312-9775 http://www.debradodge.com

National Residential Mortgage Center LaVista
0 votes Thank Flag Link Thu Jan 9, 2014
So long as Fannie/Freddie's underwriting system approves the loan, DTI is not a factor, even with the new QM mortgage rules.

Based on the information you gave, you should be fine so long as the DTI is 45% or less. Higher than that might cause the PMI company to reject your application.

Good luck!
0 votes Thank Flag Link Wed Jan 8, 2014
You should have no issues based on the information you have given. If the lender has an issue with it, then contact me and I would be glad to get it approved for you.

Thanks,


Dennis W Clark
Freedom Lending, LLC
NMLS#13970
402-333-5432
dennis@mortgageloansofamerica.com
0 votes Thank Flag Link Wed Jan 8, 2014
At 40% you will still be fine. My main investor is limiting their approvals to 45% DTI and I have another investor that says they are not changing anything.
0 votes Thank Flag Link Wed Jan 8, 2014
Hi great question. I used to have my own mortgage business for 15 years and have a been a RE agent now with Deeb for several years. You're right there are a lot of changes coming for mortgage loans on jan 10th biggest one is to the debt to income requirements. Most generally with your credit score you should be able to go up to 43% debt to gross income on a conventional loan maybe 45% depending on lender. So with a combined gross income of $8279 you can have a mortgage payment of $1159 with all other debt.


I tell you what I would call Larry Alexander of Great Plains Mortgage here in Omaha. he ones of the top brokers in the area and he has some lenders that can do loan the banks cannot. He deals with about 10 different lenders total. he will also get your loan closed quicker than a bank normally will. If you have any questions on the loan priocess or want to get a second opinion, call him at 402-502-3599 or myself at 402-699-9555.

Scott Francis
Deeb RE
0 votes Thank Flag Link Wed Jan 8, 2014
If you're at 40% DTI, you're bumping really close to the underwriter's limit. At this point, your loan approval depends on how the lender interprets your debts.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Wed Jan 8, 2014
With those FICOs and reserves you'lll be fine at 40%
Flag Wed Jan 8, 2014
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