FHA Question

[melissa81]

I am not sure if I got the right thread or if I am even on the right website. But I am looking at a FHA loan. My credit score is 723 and my DTI is 49% (this would be with the mortgage payment). I do have student loans but they are in deferrment until 2011. I am concerned about my DTI and if that will have an impact on my getting the loan.

Any suggestions, help, input?

FHA ratios are top and bottom.....the top is the mortgage to income and the FHA guidelines are 33% mortgage payment to income, the top is all debt to income and the guideline is 41% all debt (including the mortgage) to income.

They will not skew the Student Loans in the mix if they are deferred out 12 months or more. What is the bottom and top ratio without the student loans.....

49% on the Bottom ratio is very, very high and few if any underwriters will stick their necks out that much even with compelling compensating factors. Is there any other income that is stable, although not usable in the traditional sense. Can you have your parents or a family member take the auto loan out in their name to reduce the exposure in the ratios? How about consolidating some of the unsecured debt at a Credit Union on a signature loan and reducing the payments and closing out the Credit Cards? Do you have some liquidity, i.e. savings for compensating factors....the FICO is awesome....that is however, not a compensating factor....we as underwriters expect that the debts are to be paid and that the borrower maintain good to better credit standards.

Please let me know if you can do any of the above, the Auto trick is one that has to be done very carefully, as we underwriters will want to know why a loan has paid out so recently and just what happened to cause that. It has to be done as a "Gift" situation and therein lays the trick.

What is your present housing payment and what will the new one be under FHA....the reason that I ask is that the fact that you have maintained higher if the present one is higher is a compensating factor.....Ability to preclude financial matters with a higher payment prior to the new payment is a huge compensating factor......

[melissa81]

The top ratio is right at the 33% mark. I am working through a company who has their own financing section. The agent said I should be fine. Granted, you are right about the high DTI. I do have a small amount of money that I have maintained in my savings. I presently pay 800 a month in rent. The new payment would be 1100 (with taxes, condo assoc. fee, and mortgage insurance).