co-signer

geelow · Joined: 07 Oct 2009 Posts: 1 Location: TX

Today, my loan officer called me and told me my debt to income ratio is too high.

I initially talked to Quicken Loan over 3 weeks ago. He said I cannot get approved because I don't have enough income. So I asked my aunt to co-sign, and she agreed.
The officer told me, with my aunt co-signing, they can definitely approve my loan. So it started. We (me and my partner) received a pre-approval letter and found a house. We applied and paid $400 deposit. for 2 weeks, the loan officer kept telling me everything was fine, and we were going to close a week before the closing date. (closing date was set to Oct 23rd initially)

A few days ago, he called me and told me about my debt. My aunt and I have the same auto loan account because I co-signed her auto loan. (I have better credit-740). He said he was going to take care of that.

Today, he called me and told me what happened. He said automated system he punched in calculated the income as mine and my aunts added together. Then it calculated the debt to income ratio using combined income and it approved the loan. (which sounds reasonable)
But the underwriter said, I have to have debt income ratio of less than 70% and declined the loan....
He said since she's not staying with me they can't combine the income to calculate my debt to income ratio.

That was the whole purpose of having my aunt as a co-signer. I have no idea what they were doing until today.

Now, they're saying I have to have somebody staying with me to co-sign. I asked them about my partner, but since he has credit score of 570, they cannot accept him as a co-signer.

So since I don't have enough income, I cannot get the loan even though I have a co-signer?

Is it possible to make my partner (with low credit score) as a main borrower and we (me and my aunt) co-sign to cover his bad credit?

Should I talk to some other lenders?
We already spent $400 for deposit (they used it for appraisal and credit report, so no refund basically) and $300 for inspection.

Thanks

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

geelow

If your DTI is in the 70% range, then you really SHOULD NOT get that loan regardless as to whether you have a co-signer. If you are planning to make the payments yourself, then you cannot afford this loan. If your aunt was going to share the expenses with you, then that is different. However, typically co-signers are there to bring income to the application but do not actually help with the payments.

A 70% DTI is way too high.