November 21, 2019 at 10:20 am #62381aenigma87Participant
Hi I’m planning to be in the program but I have a question about DTI.
I bought my first house 2 yrs ago thru conventional loan. I was gonna get NACA program at that time but my husband wasn’t qualified because of employment gap.
My question is about DTI. I just consolidated my debt a month ago and my mistake is I took a personal loan of 15k for only 24 months. I want to pay my debt really fast. The monthly payment is really high,$727 per month. Because of that, our DTI is at 44%. I we have 2 car payments and some credit card with balance. We can manage it because our current mortgage is only $600 a month. We will sell our house before closing with NACA. Do you think I can tell my MC that I will pay my personal loan using the money I gained through selling my current house? Our house right now has appraise it’s value because of the renovations we did. The personal loan I took before is for doing some renovations in our house.
I really want to be qualified thru NACA because our house is located far away from my job. I have an more than an hour commute every day. When we bought the house, it was only based on my income but now my husband have a stable job and mine too which makes us think that the we can afford to buy a house in the city.November 21, 2019 at 10:44 am #62382NelsontMember
You cannot get qualified under any circumstances until your DTI is already 40% or below. If you join naca with a 44% DTI you wil get an Action Plan to work on your debt and savings and to follow up in a few months when your debt is paid off.
You can most certainly use the funds from the sale of your current house to pay off your personal loan but, it will need to be done before you qualify (which is before you are even able to start looking at houses) unless you can pay off other debt first to bring your DTI to 40% including the personal loan.
The issue with the personal loan is that you need to show payment history. So unless you can pay that off completely you might have to wait quite a while before you meet the payment history requirements.November 21, 2019 at 1:00 pm #62387TTrumbleMember
Unfortunately, you have created a couple of setbacks for yourself in the qualification process.
You will not be qualified until you DTI goes below 40%. Plus, if that is your current DTI, that means you won’t be able to qualify for more than your present $600 mortgage payment.
Additionally, the consolidation loan may set you back a month or two simply because the payoffs and the consolidation loan are going to have to show up on your credit report. Sixty days is not an unusual time frame for that to happen.
Telling the MC you will pay down debts with the proceeds of the sale of your present house is not going to be acceptable. Until you have closed on the sale, there is no way to guarantee that the house will even sell at a profit.
In short, you are going to have to take your time and do this deliberately and methodically. This isn’t going to be a quick process for you. It looks as if your primary focus right now is going to be dramatically reducing your non-housing debt so you can be approved for a reasonable monthly mortgage payment.
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