Qulifying question/help/concern...all the above!!!

paperclip · Joined: 06 Nov 2009 Posts: 2

I will be relocating soon and will be purchasing a new home, I am wondering if I am going to have trouble with my current circumstances.
Facts:

Not in trouble my current mortgage.
I have never been late on any bill.
Monthly income is $10,775.45 minimum (higher sometimes due to overtime)
Current DTI 55% with current mortgage and HELOC and revolving debt, 36% without mortgage and HELOC.
Credit score is 690. It was higher, but CC companies lowered my credit limits, thus making percent of credit used higher.
Current market where I am is holding steady and SHOULD make $40k on sale but not guaranteed.

Questions:
Will I qualify for a mortgage in my new area?
Looking at $300K homes with about $1900 PITI.
I am going to use my VA benefits to get the new mortgage. No down payment and they use a flat 41% DTI. But there is a 3% funding fee that can be rolled into the loan for no PMI.
I feel there is no hope and do not know what to do.
:oops:

Kathleen · Joined: 01 Dec 2009 Posts: 7 Location: Pleasanton, CA

If your debt to income ratio with your current home is already 55%; getting any new loan using just your income is going to be a tough one.

With VA you cannot use a non-occupying co-borrower. If you are married than using your spouses income would be best.

Another option is to go FHA with the minimum of 3.5% down and get a non-occupying co-borrower. You can use the non-occupant co-borrower's income and debt to blend both of you together to see if the DTI comes down.

With respect to the current property can your rent it? Depending you might be able to offset some of your debt on the curretn residence with a executed lease agreement and a cashed depoist check to rent it.

Is there a VA loan on the current house? You cannot have more than 1 VA loan at a time even if you are relocating.

Let me know if you have any other quesitons.

paperclip · Joined: 06 Nov 2009 Posts: 2

I was not clear....I will be free of my current mortgage and HELOC. They will both have been paid in full. So my DTI will be about 36% at the time I am seeking a new mortgage.

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

Well a DTI of 36% would surely work.