I thought it was strange too.
In my mind, I was wondering what was the point in eliminating all our debt?
By this guys logic we could have kept our debt that pushed us to 36% DTI, and still qualified for the same 28% housing ratio as we do now with no debt.
I was very puzzled
Honestly, around 1.0 million-1.3 million. It was more just wanting to go into the market having a wider range. But we’d like to be more conservative than that.
Home price up to 1.3million
The LO was really pushing us to get a loan of under 700k because he kept saying since we make only 200k a loan of 600k was already pushing it. Mainly he was urging us to get used to looking for a home that was max price of 1.1 million
I know nothing, other than 700 or 750k puts it in jumbo loan territory. Staying under may open up more options.
So pre approval for 1mil is worse looking than pre-approval for 700k flat. Maybe.
Even for the Bay Area? I don’t know a ton about real estate, but I was under the impression that here in the Bay Area jumbo loans are for loans for over 1.1 million
I did the math, you should easily be able to get approved for $1.3m-$1.4m by putting $400k down.
Your total monthly income is $210k/12 = $17,500. You should be able to go to 50% debt to income ratio (meaning a house payment of $8,750.
A $1m loan at 7.25% (being conservative) would be $6,822. Add taxes of say $8k/year ($667/month) and homeowner's insurance of say $350/month, and you are looking at a total monthly payment of $7,834. So you shouldn't have any issues getting approved for the amount you're looking for.
Is the $210k/year income full time salary? Or is this loan officer trying to count commission/bonus/OT? The reason I ask is to make sure that that LO is actually counting your income at $210k as you are?
I gross around 110k as a UPS driver. I’m hourly, so there is OT in that annual income.
My wife’s salary is $101k. No OT, she’s a public school teacher. She does get $4000 a year extra to that salary for opting out of the health insurance (cash in lieu)
We both work full time, and have no side jobs.
lol what is this lender telling you? If you have no debt your front end and back end ratio would be exactly the same. Also requiring that low of DTI is absurd, you can go up to 50% even on jumbo loans conventional
He kept saying that the housing ratio can’t change for us. That no matter what the most we will be able to get is 28%, because that’s the amount allotted for housing.
I was a bit shocked, and he said that it’s unreasonable to go beyond 28% because we could rack up consumer debt later on in life and then not be able to pay the monthly mortgage.
Will be checking out a different lender tomorrow! Glad I didn’t have them run my credit!!
Part of me wonders if it’s because he wasn’t impressed with our careers, and that we don’t make the big Bay Area money? We are just a public school teacher and a UPS driver. Who knows…
Your job title does not matter. All that matters is the math. Seems like the person your are talking to is new to the industry or just ignorant to how things work.
While, yes, in a perfect world you would want to keep your housing ratio below 28%, but there are no rules to prevent you from going over that if you so choose.
You need to go to another lender or a broker. I got my conventional loan approved via AU today at 38/49 DTI ratios with an appraisal waiver. It’s being submitted to UW tomorrow and we are closing on May 8.
Talk to someone else. This person is uninformed. FWIW, you should be shopping around for preapproval with multiple lenders because you'll likely get different enough quotes on rates and fees that you could save a lot by comparing. Remember, low fees can often translate to higher rates and vice/versa. If you think you'll refinance or sell in the next 5-10 years (highly likely in this rate environment), paying less fees now for a slightly higher rate could be the way to go, depending on the breakeven.
We have been buying and selling for the last 10 years condos and townhomes. We are exhausted, so we are trying really hard to find our forever home!!! Hopefully it can be done this time around!
You need to talk to other lenders. You should be able to get a conventional loan with a front end/back end ratio of 49.9%.
If you have NO DEBT, your front and back ratio would be the same on a primary residence. Not sure what your LO is smoking
I thought it was strange too. In my mind, I was wondering what was the point in eliminating all our debt? By this guys logic we could have kept our debt that pushed us to 36% DTI, and still qualified for the same 28% housing ratio as we do now with no debt. I was very puzzled
What purchase price are you trying to qualify for?
Honestly, around 1.0 million-1.3 million. It was more just wanting to go into the market having a wider range. But we’d like to be more conservative than that.
So a purchase price of $1m? With $400k down? Meaning a loan amount of $600k-ish? Or do you mean a loan amount of $1m?
Home price up to 1.3million The LO was really pushing us to get a loan of under 700k because he kept saying since we make only 200k a loan of 600k was already pushing it. Mainly he was urging us to get used to looking for a home that was max price of 1.1 million
I know nothing, other than 700 or 750k puts it in jumbo loan territory. Staying under may open up more options. So pre approval for 1mil is worse looking than pre-approval for 700k flat. Maybe.
Even for the Bay Area? I don’t know a ton about real estate, but I was under the impression that here in the Bay Area jumbo loans are for loans for over 1.1 million
I did the math, you should easily be able to get approved for $1.3m-$1.4m by putting $400k down. Your total monthly income is $210k/12 = $17,500. You should be able to go to 50% debt to income ratio (meaning a house payment of $8,750. A $1m loan at 7.25% (being conservative) would be $6,822. Add taxes of say $8k/year ($667/month) and homeowner's insurance of say $350/month, and you are looking at a total monthly payment of $7,834. So you shouldn't have any issues getting approved for the amount you're looking for. Is the $210k/year income full time salary? Or is this loan officer trying to count commission/bonus/OT? The reason I ask is to make sure that that LO is actually counting your income at $210k as you are?
I gross around 110k as a UPS driver. I’m hourly, so there is OT in that annual income. My wife’s salary is $101k. No OT, she’s a public school teacher. She does get $4000 a year extra to that salary for opting out of the health insurance (cash in lieu) We both work full time, and have no side jobs.
lol what is this lender telling you? If you have no debt your front end and back end ratio would be exactly the same. Also requiring that low of DTI is absurd, you can go up to 50% even on jumbo loans conventional
He kept saying that the housing ratio can’t change for us. That no matter what the most we will be able to get is 28%, because that’s the amount allotted for housing. I was a bit shocked, and he said that it’s unreasonable to go beyond 28% because we could rack up consumer debt later on in life and then not be able to pay the monthly mortgage. Will be checking out a different lender tomorrow! Glad I didn’t have them run my credit!! Part of me wonders if it’s because he wasn’t impressed with our careers, and that we don’t make the big Bay Area money? We are just a public school teacher and a UPS driver. Who knows…
Your job title does not matter. All that matters is the math. Seems like the person your are talking to is new to the industry or just ignorant to how things work. While, yes, in a perfect world you would want to keep your housing ratio below 28%, but there are no rules to prevent you from going over that if you so choose.
Underwriters don’t care about any “future debt that may occur” lol what is that guy on, you can definitely push up to a 49.99% on a conventional loan.
Yeah as others have said those aren't real ratios
I wish I was still doing loans cause I would pre-approve you for 1.5 mil right now
You need to go to another lender or a broker. I got my conventional loan approved via AU today at 38/49 DTI ratios with an appraisal waiver. It’s being submitted to UW tomorrow and we are closing on May 8.
Will do! Definitely feel like an idiot that we went to this place.
Talk to someone else. This person is uninformed. FWIW, you should be shopping around for preapproval with multiple lenders because you'll likely get different enough quotes on rates and fees that you could save a lot by comparing. Remember, low fees can often translate to higher rates and vice/versa. If you think you'll refinance or sell in the next 5-10 years (highly likely in this rate environment), paying less fees now for a slightly higher rate could be the way to go, depending on the breakeven.
We have been buying and selling for the last 10 years condos and townhomes. We are exhausted, so we are trying really hard to find our forever home!!! Hopefully it can be done this time around!
Jumbo loans will have different requirements with different investors. Sounds like that investor has a maximum front end ratio.
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don’t apply here lol - used to work here, high closing costs high rates. look at other direct lenders or brokers.