High Debt/Income Ratio
How bad is this? My Fico is around 640. I have about 15K of credit card debt & another 40K of student loan debt.
My income is 45K a year.
Every thing is current & 'Paid as Agreed' for the last 24 months, just high utilization rates on revolving accounts. I also have one paid chargeoff from 2000.
I can probably pay off around 10K of the credit card debt in the immediate future.
Will I be able to get a mortgage. At worst, can I get a NINA or No doc mortgage?
I am looking to buy a probably that will cost around 200K & can put down around 20%.
To answer your question. My credit score was 659, I owed 7650 on a new car. 2000 in credit card debt. Only had credit for 11 months. I had no collateral or money in the bank. I now own two condos. Oh yeah, i only make $7.75/hour at work $15,000 year and i got a loan, i don't see why you couldn't. just find the right people who are willing to work with you and for you and it won't be a problem. the guys i work with know me and i personally know the loan officer now that he has taken a chance on me and i do all my business through him. so find someone and build a business relationship.
[addsig]
that shouldnt stop the process.
But, can I get a mortgage for about 160K? Even if I need to get a higher rate with a NINA or no doc?
I have enough cash set aside for a 20% down payment & $15,000 to pay off credit card debt.
Even if the debt/income ratios are out of whack with my existing debt load. (over 40% on the back end), I can probably 'eat the additional cost' until my income catches up.
I am 28, single & work for a mutual fund services doing fund accounting.
honestly, that depends on the lender. they all have different criteria. but here is some advice, private lenders are more flexible and willing to listen than banks are. you may have to pay a higher percentage, but you can buy it down. i personally don't even use banks on any transactions because i don't qualify for even a $500 personal loan!!! look for a private lender, you shouldn't have a problem. my first deal, i didn't even have one bit of credit. not even a credit card.
yes try the smaller home town banks i have a 94% debt/income the big banks shy away but the little one grab me up. i left my foundry job 2 years ago and they look at the income from my rentals. the key is to sell your self to the bank tell why your a good risk your may have to start small and work your way up but it can be done with hi ratio's.
try calling your credit cards and asking them to raise your limits, this will lower your dept to credit ratio and boost your credit score. dont close your accounts after they are paid off.
John