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Million dollar home in Valley Village, but slightly high DTI

I co-own a home in Valley Village, 3000 sf, corner lot, 3BR 3BA, pool, central air/heat, worth around a million dollars (according to Zillow). We would like to refinance and take out $10,000 for some home improvement, but have a slightly too-high DTI. Last loan company said it was 50.16. We both have very high credit scores, but our income sources are not consistent. My partner is a musician who works lots of different places and in different states. I recently stopped being a home care giver (9 years) for my disabled sister when she passed away, so no longer have that steady income. I am starting my own business as a notary public and Live Scan fingerprinter (among other things), and still get a little unemployment. We aren't having trouble making our current house payment, and have no car payments or other loans. 

Is there any way to refinance with a DTI in that range?
  • June 14 2013 - North Hollywood
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Answers (4)

Quite likely Citimortgage just services the loan for Fannie Mae or Freddie Mac or another investor, so their decision on your loan would be entirely on if it fit their current underwriting guidelines.

With your debt to income ratio being right at the cusp of where you need to be, the assets you mention can also potentially be used as qualifying income. The W2 would count as income as long as he still employed by that source, and the 1099 would depend on what he files on Schedule C.

I would be happy to give you a second look on your scenario if you would like to get in touch through my profile.
  • June 14 2013
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Profile picture for EricAndrist
My partner has both w2 and 1099 income. He has money in IRA's, life insurance and stocks and mutual funds, worth close to $200k.

Our current mortgage is $220k @ 5%, and we'd like to take out $10k.

Our debt is mostly just the house payment, property taxes (around $9k), and utilities. 

It's just an odd circumstance in that even though the DTI is that amount and the income looks widely varied, we have no problems paying our mortgage and bills. 

It's also odd that we've been with CitiMortgage for a long time now, never late on a payment, but they won't refinance so that it's even easier to make the payment! 
  • June 14 2013
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If you have reserve assets, often a conventional approval is avaiable to 49.99 ratio.    If you are at 50.16 it would be easy to tweak one of many items to get the numbers in line.  This assumes loan amount will be 625500 or less for Los Angeles County.

From what you have described, none of your income will be allowed toward qualifying, so it might make sense to look at apply in only your partner name (if you have any liability of your own on credit report).  

It sounds like the other borrower is self-employed sole proprietor, so analysis of their Schedule C would be necessary to determine qualifying income.
  • June 14 2013
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You could look FHA depending on loan amount.    They accept higher debt to income ratios.  What is the loan amount?  Is there room to take out more cash to pay down some of your debt to have a lower DTI?
  • June 14 2013
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