I am looking for a 1st mortgage, but my debt to income ratio is pretty high. My credit score is good, will

Asked by Living With Family, Texas Wed Aug 13, 2008

it be difficult to get a loan in this market?

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T.E. & Naima…, Agent, Dallas, TX
Thu Aug 14, 2008
Depending on the type of loan you're thinking of, the amount of down-payment you can make, your other assets, you may or may not have a difficult time. Also, the definitions of "high DTI" and "good credit" mean something different to mortgage professionals from consumers.
To answer properly we would have to know all these things.
High DTI would be above 43%, but some lenders will still approve you up to about 48% with other factors, like down-payment and other assets. If your new house payment will cause payment shock, or raise your DTI above this, then your chances are slim.
Good credit would be above 680, but some lenders using FHA will approve you down to about 620.
Web Reference:  http://www.Mortgages-TX.com
1 vote
, ,
Thu Aug 14, 2008
If you have a high debt to income ratio then adding a house payment to that could cause you problems. Have you consulted with a loan professional that has told you that you will have a hard time qualifying or are you looking at your debt and thinking it is to high. The only way this would probably make sense for you is if you are buying and getting a payment less than what you are paying now. One thing I hate to see people do is get into a house and become house poor and unable to pay off debt so they can truely enjoy there life in there new home. If you want to talk further I would be happy to help but you need a professional to review your current situation and come up with a plan for getting you into a home and that plan may include paying off some debt first not only to get you to qualify but as mentioned so you can be happy and comfortable in the home. Best of luck to you.
1 vote
Lee Collins, , 85242
Wed Aug 13, 2008
It comes down to finding a loan professional that can review all of the loan options and programs specifically for you. The answer to your questions will come with reviewing your overall situation and financial goals with a loan officer you can trust.

It is one thing to qualify for a loan, and another one to be able to afford it. Make sure you are getting into a loan that will not adjust. Ask questions about your property taxes, home owners associations and all other payments that could possible change. Also consider the cost of gas for your car and utilities for your home.

I don't want to talk you out of buying, because this is an absolutely great time to buy. I want to make sure you buy something you can afford for the long haul, because when you buy in this market; you need to make sure you can afford it comfortably. It is no secret that with the housing market the way it is you will not easily be able to refi or sell. Get a loan you can handle today and for the long term.

Any one that helps you with your home loan should be walking you through all of these questions and concerns.
Web Reference:  http://www.lendethics.com
1 vote
Debt Free Da…, , 85260
Sat Aug 16, 2008
I would work on getting your debt down before you get into a home.
0 votes
Dave Muti, , 07054
Wed Aug 13, 2008
My advice might be (after I learned more about your situation) would be to perhaps hold off on buying now? Take some time to save more for a down payment, look at lower priced homes and/or wait until you make more money?

I know that is probably not what you want to hear but I would hate to find out that you were able to get a loan but then had difficulty in making payments on your mortgage and/or other debts and became a statistic? There are a lot of factors involved such as your current income situation, is there a co-borrower, what is your time horizon, do you have any credit card debt, student loans and a host of other factors that would go in to my advice. Find a good local mortgage planner and have them fully assess your situation. I hope this helps.
Dave Muti
0 votes
Mattye Smith, Agent, Addison, TX
Wed Aug 13, 2008
You should have some options available in your situation. I have a lender on my team that will visit with you and plan the best course of action.

Contact me for an interview to see if you qualify for my Realtor's Rebate Program.

Mattye P. Smith

Colonial Real Estate
0 votes
, ,
Wed Aug 13, 2008
Debt ratios are one factor.... which can be overcome by other factors. High debt ratios aren't a deal killler. I have seen some pretty high ratios still get approved in this market with other compensating factors. Ex: Good, long term job and a decent amount of money in savings or 401K tends to compensate for the ratios.
Down payment helps too.....
How high are we talking about?
0 votes
Patrick Dugan, Agent, California, MD
Wed Aug 13, 2008
Unfortunately due to over reaction to all of the bad loans that were made in teh past 5-7 years we now have a hard time getting loans for good credit scores as well as troubled. However, with patience and good advice you will be bale to finds a loan, you just have to stay in certain price ranges.
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