Iam trying to buy a house. I have good credit. The only problem on my credit is my student loans. I am getting them consolidated. I have the paper work that shows that, but no one want to give me a loan. (DTI is the problem) Is there anyway around this? I am tried of renting.
2 Comments Already
July 8th, 2010 @8:06 am
Well, it depends on the status of those student loans and how large they are. If you are paying them on time and at least the minimum payment due (which I would guess you are if your credit is good), then you shouldn’t have any problem getting a loan UNLESS those loans eat up a large portion of your income. Most lenders want your debt-to-income ratio, including your mortgage payment, to be no more than 41% of your monthly income. Your mortgage should be about 30% of that number (some lenders may go more), so if the mimimum payments each month are eating up more than 11% of your income that’s probably why you can’t qualify. If that’s the case, then you’ll need to wait until your loans are actually consolidated and you have the new payment before you try to get approved again.
Try again after you have had your loans consolidated and you have your new payment schedule. Until the debts are officially consolidated, nothing is final and if the DTI is over the 39 to 41% (depending on lender) with mortgage payment, you won’t have any luck.