debt to income ratio

miamoto · 09-24-2008, 10:35 PM

We are applying for a loan modification with Citi Mortgage and will be faxing in information in the next two days. We have a second mortgage with them that is at 12.75% interest on a 15 year balloon note. We have had a change in our income and have not been able to afford the payments on this loan. Our first mortgage is with Wells Fargo and is current. I am so scared that we are not going to qualify for the modification because I don't know what they are looking for? They told me no more than 60% debt to income ratio but does this include the payment I make to them? Also, is it based on just mortgage to gross income or net income to all bills? Please help!!! We can't afford for this not to go through. Thanks.

Dan Bailey · 09-25-2008, 04:32 AM

Miamoto, Welcome to the forum and thank you for joining. *** or Moe will be by to give you some direction with your question as soon as they can. Hang in there! Good luck!

susieq68 · 09-25-2008, 10:58 AM

Hi. It is based on gross income. They were using income verses expenses, but they recently switched. If you payment is over 40% of your income, they will modify. This is based on your current monthly payment. Hope all goes well. I have been working on this since Jan. 08 myself. I just received a modification offer. They went down 1 point, and with the amount I owed and late fees it works out to be higher the payment was to begin with. But I guess I should thank you to God they are not trying to foreclose. Good Luck!

miamoto · 09-25-2008, 11:13 AM

Thanks for your advice. So when I add up all of my expenses including my mortgage, They should not be over 60 % of my gross monthly income? Or is it just my mortgage payment (1st and 2nd) being higher than 40% of my monthly gross income?

susieq68 · 09-25-2008, 12:34 PM

They do not go my expenses anymore. I was told they only go by income, because they an not control people's expenses, because some are not neccassary or controllable. If your house payment is less than 40% or equal to 40% of your income, then I was told they are no longer modifying those. I believe I have read a few more threads that say the same thing. I do not think that your first house payment counts. They may have diffrent rules if you have out 2 loans on your house.

Good Luck!!!