Who is the best lender to ref with a high DTI 59% and credit score in mid 600's?

Asked by Tinker, Haverhill, MA Fri Jun 4, 2010

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Geoffrey Boyd’s answer
Geoffrey Boyd, , Oregon
Tue Jun 8, 2010
Rudy,
Thanks for the response. I work for a nationwide mortgage bank and have been in the bsiness for over 20 years (and still having a great time!) The 43% that you reference is related to manually underwritten files, not AU files. If LP or DU accepts the file, it is done as long as the underwriter can validate the data. That being said, some lenders have overlays that limit them to a specific DTI regardless of findings. This is an investor issue and will vary from lender to lender, but is not an FHA standard. In fact, if you are having problems closing FHA loans with DTIs above 43%, please let me know. I am sure that we have an office nearby that would love to have you on their team. :-) Again, my comments regarding the banker vs broker was related to getting more flexibility (in some areas) with a mortgage bank as opposed to a commercial bank. Anyway, thanks for the great comments and perspective.
0 votes
Hi ,
My name is Michael Dagostino, based on my research with many lenders and our situation we need FHA loan do to high dept of income ratio of 48% and to consolidate our debts. The issue is that the type of home that we have is a single wide mobile home on a permanent foundation on our owned land approved a class c home . Just recently we were approved FHA loan program with LNC Loans we were ready to appraise the house but they discover in error that they don't finance single wide mobile homes....only double wide mobile homes.
We are located in Delaware. Can you help us find lenders that finance single wide mobile homes on our owned land? We really appreciate your help and your time . Thank You Michael Dagostino e-mail SPECIAL-ME1@HOTMAIL.COM
Flag Tue Mar 7, 2017
Geoffrey Boyd, , Oregon
Mon Jun 7, 2010
Tinker,
I would encourage you to find a smaller direct lender in your area to meet with. One of the issues that seems to be causing some lenders to discourage you is that they are subject to underwriting "overlays". In this environment, some direct lenders will have more flexibility than a broker will, unlike in the past. In the past a mortgage broker would have had more flexibility than a banker, but in this environment, the roles are often reversed. Large banks are often more conservative, but smaller mortgage banks will have less "overlays". I personally have a few clients that have received approvals with DTIs aove 50% very recently. Despite what some people may tell you, FHA does not have a maximum DTI and many lenders will go to 620 for a credit score (some will even go lower). My most recent closing was neither a fluke or an underwriting error, it is simly proof that loans like this are quite do-able, so please don't be discouraged. If you have any questions, please feel free to ask.
1 vote
Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Tue Jun 8, 2010
Geoffrey

I work for Shore Mortgage, the nations largest and oldest privately held direct lender/mortgage company. We were founded on and specialize in FHA and VA financing and I have over 10 years experience doing them. FHA does not have a min score score requirement, but it does have a maximum backend DTI guideline which is 43%. And although there may be some lenders out there that may still do FHA loans at 620 or lower, no one is doing them with a 59% DTI. Also for the record, histrorically and currently banks are and always have been more conservative than mortgage banks and brokers.
0 votes
Hi ,
My name is Michael Dagostino, based on my research with many lenders and our situation we need FHA loan do to high dept of income ratio of 48% and to consolidate our debts. The issue is that the type of home that we have is a single wide mobile home on a permanent foundation on our owned land approved a class c home . Just recently we were approved FHA loan program with LNC Loans we were ready to appraise the house but they discover in error that they don't finance single wide mobile homes....only double wide mobile homes.
We are located in Delaware. Can you help us find lenders that finance single wide mobile homes on our owned land? We really appreciate your help and your time . Thank You Michael Dagostino e-mail SPECIAL-ME1@HOTMAIL.COM
Flag Tue Mar 7, 2017
Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Mon Jun 7, 2010
Hi Tinker

Will your DTI be 59% even after the refi? What is it now? Furthermore, like Robin, I don't know any Fannie or Feddie lenders doing Conventional loans above 45 and 50% respectively. Especially with a 600 FICO. You now need a min. of 680 to go Conventional with most lenders. To go FHA, most lenders now require a 640 and your DTI can not exceed 55%. Regardless of your compensating factors. Even if you've been making your mortgage payments at such a high DTI until now, that will not matter either. The overall risks are still just to great. Especially in this current ultra conservative lending market. If Geoffrey got one done just last week, he's either one of the last of the Mohicans, or the underwriter let one get pass him/her. Don't count on it happening twice.
0 votes
Geoffrey Boyd, , Oregon
Mon Jun 7, 2010
Thanks Robin. Great question. The last time that I closed someone with a DTI above 50%, on a conventional loan was last week. As far as FHA is concerned, we do them fairly regularly. As you know, each file has its own characteristics that will cause the file to approve. Cash reserves is not the only comp factor when an AU system approves a high DTI loan. I hope this helps.
0 votes
Hi ,
My name is Michael Dagostino, based on my research with many lenders and our situation we need FHA loan do to high dept of income ratio of 48% and to consolidate our debts. The issue is that the type of home that we have is a single wide mobile home on a permanent foundation on our owned land approved a class c home . Just recently we were approved FHA loan program with LNC Loans we were ready to appraise the house but they discover in error that they don't finance single wide mobile homes....only double wide mobile homes.
We are located in Delaware. Can you help us find lenders that finance single wide mobile homes on our owned land? We really appreciate your help and your time . Thank You Michael Dagostino e-mail SPECIAL-ME1@HOTMAIL.COM
Flag Tue Mar 7, 2017
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Fri Jun 4, 2010
Geoffrey, when was the last time you got someone a conventional loan with a DTI over 50? Fannie will only go to 45, and Freddie to 50. I doubt that you would even get a DU approval with a mid 600 FICO and a 59DTI, unless you have very large reserves. To do a high ratio on FHA you would need to get a DU approve.
0 votes
Geoffrey Boyd, , Oregon
Fri Jun 4, 2010
Tinker,

Your best bet may be an FHA loan. We do lots of them and many have DTIs above 50%. The other issue to look at is your LTV and loan amount. In a few cases, a conventional loan may work best, but with the pricing "hits" imposed by the conforming agencies, FHA may be the best way to go. I would be happy to look at this for you if you like.
Geoff
Web Reference:  http://www.geoffboyd.com
0 votes
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