I have a question about front and back end ratios in high cost markets.

Asked by Zg, South East, Sacramento, CA Sat Jul 12, 2008

I have a question about front and back end ratios in high cost markets. I am hoping to be a first time buyer in 2009 and I know that generally there are some guidelines for lending based on these ratios. With a moderate home costing 400K how can a first time buyer in expensive markets such as Southern California meet those ratios? I am an engineer and have an excellent job/salary but based on the ratios it is not good enough. Without broadcasting too much of my financial information I can say my only debt is my student loan and the payment is minimal at $130/mo. Thanks!

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Charita King - Short Sale Specialist’s answer
Charita King…, , Downey, CA
Thu Jul 17, 2008
I have to see your credit report and your financial statements. Are you self-employed? Until we see that, there is no way we can tell if you qualify or not :)
Charita King
0 votes
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Sun Jul 13, 2008

As a 1st Time Homebuyer, you are in luck. There are many programs out there to assist you in buying your first home and qualifying for the payment. If you are looking to buy in Long Beach, there are some really great deals on homes here, and some great programs to help you qualify. I am a Board Certified Down Payment Assistance Specialist and work with many 1st Time Homebuyers. Let's talk (you can contact me through my profile) and I can help point you in the right direction to get you into your first home on your time table.

Now is a great time to find a great home at a great price and negotiate a great deal. Dare to Dream!

Shel-lee Davis
Real Estate Consultant
(and long time resident & lover of Long Beach)
RE/MAX Palos Verdes Realty
0 votes
Homa Moaddel, Agent, Foothill Ranch, CA
Sat Jul 12, 2008
Hi Zg,

Not more than about 35% of your income should go to your mortagage payment. Not more than 40% should go to your total debt. For example if you are making 100K only 35K should be use to pay your mortagage. That is less than $3000/month which is about $400K home.


Broker Associate
Prudential California Realty
Mission Viejo
0 votes
Zg, Home Buyer, South East, Sacramento, CA
Sat Jul 12, 2008
Lynn, thanks for the response. I think the way I wrote my question I may have given the impression that I am just out of school. I have substantial credit history. I've had credit cards for the past 10 years since I turned 18. I also purchased/financed a new truck a couple years ago. No late payments on any CC or loan. I have since paid the truck loan off. Within the past week I got my credit report/ FICO score. That is just shy of 800.
0 votes
Dot Chance, Agent, Burbank, CA
Sat Jul 12, 2008
You should speak to Marie Richarz at Metrocities Mortgage. Her email addy is MRicharz@metrocitiesmtg.com
Web Reference:  http://www.DotChance.com
0 votes
Dallas Texas, Agent, Dallas, TN
Sat Jul 12, 2008
You only debt may only be your student loans HOWEVER what is the total amount due? Do you have other credit, you may not have truly any credit your scores could be low.
0 votes
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