Profile picture for Snickers5005

High debt to income -need refinance - not walking away like my neighbors!

Currently my mortgage is with Bank of America.  I am current, never been late & have good credit.  I do have debts - car payment, student loans and cc- but I pay every month and on time.  Bank of America says I can't refinance due to my debt to income.  Are there lenders who I can chat with regarding my situation?  I have decided to stay in my unit - even though half in my building are in short sales or foreclosures.  It is frustrating when you want to do the right thing - but can't take advantage of a good rate.  Any suggestions?
Thank you!!!

  • November 29 2010 - Chicago
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Answers (12)

Profile picture for XanderTeam
What is your DTI?

Also, do you know what type of loan you have? (FHA, conventional, etc.)

There are different programs available based on the loan you currently have.
  • November 29 2010
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Profile picture for Snickers5005

My loan is FHA.  7Yr interest only ARM.
My DTI is around 52%.  I have someone living with me that pays half the mortgage and bills. 
Thank you.

  • November 29 2010
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Many borrowers are in your situation.  There is more and more talk these days of implementing a government backed program that will allow borrowers in good standing to refinance into lower rate mortgages if they are current on their payments regardless of their debt to income ratio.   At the moment this is only available to FHA borrowers via the FHA streamline refinance program. 

One option which may help you now is paying down some of your credit card or car debt.  This will have a positive effect on your debt to income ratio and may put you below the maximum allowable ratio.  Your mortgage consultant will be able to confirm this for you.  Additionally, if you pay points to get a lower rate this will also benefit your debt to income ratio.  Good luck.
  • November 29 2010
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If your loan is interest only, then it is not an FHA loan. You should be able to get a conventional approval with a 52 DTI if you have a high score.
  • November 29 2010
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  • November 29 2010
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Agree on two comments:  You cannot have an FHA interest only loan (non-existent) and your should be able to get a loan approved with a 52% ratio.  Understand that BofA loan officers do not have to licensed through the National Mortgage Licensing System and a lot of less than stellar LO's have migrated to the safe havens of the big box banks.  Not to say all LO's at big banks are inferior...but they certainly don't work on loans as diligently as an independent mortgage banker.

I have a friend in the Chicago area with over 30 years experience if you want a referral.
  • November 29 2010
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Profile picture for MoniqueU
No one will take anything higher than a 50 back ratio.
I had an approval with a 58 back ratio with freddie mac the other day. I tried 2 banks, the big W, another bank that sold to bof a and around 10 other lenders.All declined the loan. the borrower had a million dollars in the bank and 790 credit score and had never been late with any bills and the house appraised out at 70% loan to value..
the loan was only for 300,000 too.
have you tried a loan modification? they are free and will do a high back ratio.
sounds like you don't have a retirment account so you would qualify.
all they charge is the title charges.
  • November 29 2010
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Profile picture for Jack Lewitz
Dont talk to BoA if you have an FHA loan. See if FHA will refi you. but I am kind of afraid to say you may not find anyone to do it for you if there is a high risk in your building .. you may want to also do a short sale in that building. sorry to say that when it really is not what you want to do.
  • December 17 2010
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Snickers,
Agree with the many others on here in the fact that if you have interest only you don't have an FHA loan. I'm local and would be happy to review your loan papers at no cost to see what you really have.
  • December 18 2010
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Snickers,
If your loan is truly FHA-insured and you don't want cash out, have you investigated an FHA Streamline Refi? No appraisal and no re-qualifying.
  • December 18 2010
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I work for a mortgage banker in Naperville. You said that you have someone that lives with you that pays half the bills and the mortgage. Is this person on your current loan? If not, What about putting them on the loan to help with the Debt Ratio? Depending on their credit and income, this may get you where you need to be. If that person is already on the loan, what about taking them off? This would remove all of the debt payments that they bring to the transaction. Although, this would also remove any of their income that you may have been using to qualify.

Just my 2 cents.

  • December 30 2010
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I would also check to see what other units are selling for as depending on the amount of the loan, you may not get an apprasial for the refi...Just a thought! Good Luck to you in whatever choice you make!
  • December 30 2010
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