Home Buying in Los Angeles>Question Details

Cesar Hinojo…, Home Buyer in 91702

what are the chances I get a 130k loan with 30k down , 730 credit score and 49% dti?

Asked by Cesar Hinojojsa, 91702 Sat Jan 19, 2013

Will Wells Fargo give me the loan?

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Dan Tabit’s answer
Possible, depending on other factors. Meet with a local full service lender and discuss your plans and goals. DTI is a problem which can often be overcome by a careful examination and some planning.
Your score is fine and you nearly have 20% down.
Some options, assuming what you wrote is accurate, put down less and pay off debts, use a different loan to achieve acceptable DTI, find additional income you are not currently crediting yourself.
Here's the next question, assuming your information is correct are you sure you want to put yourself in this level of risk? The reasons banks have DTI ratio's is to ensure the borrower can afford the purchase. If you are on the edge financially and you get sick, lose your job or have a financial emergency you could be in trouble very quickly.
Take a good look at your options, discuss them with a lender and consider carefully how you want to move forward. Best of luck.
1 vote Thank Flag Link Sat Jan 19, 2013
Cesar, what I am almost 100% positive happened is that the bank accessed your tax returns from the IRS using the 4506T form that you signed, and they found that you deducted unreimbursed business expenses from your income. This is one of the reasons why we like to take your tax returns up-front, even if you only have W-2 income. All lenders do this now. The other possibility is if you have a separate business return that uses one of the schedules, and that shows a loss. This also shows up on the 4506 transcripts.
I am not sure who mentioned that you went to Wells Fargo, but they will only go to 45% DTI, even though they are a Freddie Mac lender, and Freddie is the only one that will go to 50%. However, that being said, all lenders can put their own overlays on the guidelines, and can restrict you to 45. There is talk of new guidelines reducing DTI to 43, so people have to watch out for these things. I know everyone wants to pile on as many deductions as possible to reduce their taxable income, but this is the thing that comes back to haunt you when you are applying for a loan.
0 votes Thank Flag Link Tue Jan 22, 2013
Looks like you match up. Have you been in the same line of work for 2+ years (continuous)? That would probably be one of the major things that would hold you up or any previous bk, foreclosure or short sale. Call me for more info.

Caroline Harabedian
RE-Search Concept
8700 Reseda Blvd., Suite 213-B
Northridge, California 91324
(818) 967-9626 mobile
(818) 979-0226 fax
0 votes Thank Flag Link Mon Jan 21, 2013
Thank you very much Dan ! again , good advice ! enjoy your weekend .
0 votes Thank Flag Link Sat Jan 19, 2013
Great job preparing and getting a good deal on the house. Lenders will use the lower of the appraised price or purchase price to determine loan to value, so while it helps, it won't be formally recognized.
Your income is very good, but my experience getting the higher DTI was usually for borrowers quite a bit more than that. I think at this stage of the game, you've likely done all you can and need to wait until they decide. Each underwriter has their own idea of what makes something acceptable under the guidelines and where they might make an exception. I'd say some prayers and find something fun to do and get your mind off of it for a while.
0 votes Thank Flag Link Sat Jan 19, 2013
oh and the house was appraised at 145k so its already up 15k...
0 votes Thank Flag Link Sat Jan 19, 2013
Thank you Dan, my gross income is above 70k a year so I dont know if that's considered high income.... good tips : ) . I have been prepearing for this for a few months now and I've paid off and consolidated CC as far as I can go to be ready and I was ready according to them but not now apparenty : (
0 votes Thank Flag Link Sat Jan 19, 2013
I would love to tell you yes, but I have no way of knowing. What I can tell you is that DTI is often based on information that can be updated. Have you paid off or added any recent debt? If paid off, get the proof to your lender immediately. Are the payments the lender is using based on your credit report? These are often estimates and can be way off. Review your actual statements from any credit cards and see how they align with the credit report. If the credit report is using a 5% default and the actual minimum payment is less, your actual payment should be used, even if you make higher ones.
I've seen DTI's up to 51% approved, but this is typically higher income people. The necessities such as food, lights and gas which are not calculated into DTI are a lower portion of income as income goes up.
0 votes Thank Flag Link Sat Jan 19, 2013
yes Sona , thank you. I'm already in contract to purchase a home in TX but the weekend is here and watting for a responce from the bank is killing me lol so I fuguere I asked arround to see what my chances are ...
0 votes Thank Flag Link Sat Jan 19, 2013
With your dti I would deal with a broker Wells fargo is a traditional lender and more than likely NOT fund that loan...
0 votes Thank Flag Link Sat Jan 19, 2013
I know a lender and they have stated income loans 700+ fico , 30-40% down , primary residence only. Rates below 5%

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0 votes Thank Flag Link Sat Jan 19, 2013
Thank you Dan, my problem is that my bank had told me I was at 45% dti and now they're saying I'm at 49% dti because of some tax deduction or expences I claimed last year and they tell me this 4 days before closing date. They're telling me that my loan has to be looked up by a higher up for final approval. Do you think the higher up will approve it?
0 votes Thank Flag Link Sat Jan 19, 2013
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