Can anyone help?

NY2NC35 · Joined: 26 Jun 2009 Posts: 1

My Mom is looking to buy another home. She will be looking for a loan here are some specifics:

Excellent mortgage history (9 yrs)
Very good credit score (prob 680-720 range)
Will have a decent down payment once her current sells (prob in the $5000-7000 range)

Now, here is where she is stressing....her income which is around $30-31K per year. Her debt load is $245 car, $150 other, $50 credit card. She currently handles that plus her mortgage of $700 with no problem. She will be looking to purchase in the $115-125k range. Will she be able to get another mortgage?. THANKS!! :)

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

I would say no. In fact, even if she did not have that other mortgage payment of $700, her back end ratio would be close to 50%. (assuming loan of $110k, rate of 5.5% and taxes of $2000 per yr)

Maximum back end ratio should be 36%-40% for that LTV scenario depending upon the bank.

NCMorgan · Joined: 11 Jan 2009 Posts: 2

Hmmm, odd...so if she purchases a home for 120k sales price and 5% down is $6000 so new loan $114k. Taxes and Insurance will be no more than $105 per month(in this area). That would put her payment at $750 give/take and PMI of maybe extra $50. Would that not be closer to backend of 43%??.

m2c · Joined: 03 Aug 2005 Posts: 937

Wow, you've go to be living in a low tax state! Around here you'd be talking around $160 per month for taxes and insurance at $50. MI shouild be north of $75. At $30 Gs that's 37% on the front and if you know an MI company that will exceed 41% TDR, please share the name.

Then there's that issue about closting costs. FHA might get approved but I'd feel bad about it.

I think Eric is right on.

Roger_Silvester · Joined: 29 Jun 2009 Posts: 51

I really doubt that she would get a loan.

There are some more factors to consider:
1. Duration of Loan
2. Property Tax
3. Property Insurance
4. PMI
5. Other Charges and Fees by the lender

Considering a Loan of 110K for 20 yrs with 5.5% Interest, $3000 Property Tax annually, $1500 Insurance and PMI at .5%, still i think the Monthly payments would not be less than $1150.

The situation can be more favorable if she can put more towards down payment, maybe about 15%

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

NcMorgan

I think your math is off.

KristinK908 · Joined: 29 Sep 2009 Posts: 26 Location: New Jersey

what state?
can anyone go on loan with her?