- Find a Real Estate Professional
- Alabama Realtors®
- Alabama Mortgage Lenders
- Alabama Home Improvement Pros
- Alabama Other Real Estate Services
- Review an Agent, Lender or Pro
- Marketing on Zillow
- Real Estate Agent Advertising
- Join the Professional Directory
- More
Answers (18)
- wunderwomin
- Contributions:3
Great to hear, thank you. I don't know DU results yet because my file can't be submitted until I get seller's bank approval. I'll stop worrying for now, though - thanks again.
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3428
34/41 is very comfortable, you will be fine. FHA commonly will approve to 46.99/56.99 ratios
- Rohit Mohan, "MortgageGeek"
- Contributions:100
Hi Wunderwomin,
If your loan officer has a DU approval with 34% front end and 41% back end then you should be fine. No need to worry. You can email me in case you want to check the rates provided to you are competitive.
Cheers!
If your loan officer has a DU approval with 34% front end and 41% back end then you should be fine. No need to worry. You can email me in case you want to check the rates provided to you are competitive.
Cheers!
- wunderwomin
- Contributions:3
Sorry, I don't know where I got that 8%. My gross income is $7K and mortgage payment (PITI + MMI) would be $2,358, with monthly expenses (credit card and auto loan payments) being $520. So I guess that makes my back-end ratio 41%?
Thanks for your reply.
Thanks for your reply.
- Rohit Mohan, "MortgageGeek"
- Contributions:100
Hi Wunderwomin,
If you front end ratio is 34% then the min back end ratio has to be the same as front end ratio. It cannot be 8%, has to be more than or equal to 34%.
Anyway, you should be fine even with a higher ratio of 45% or more as long as you have a DU approval. I don't see any need of concern.
If you front end ratio is 34% then the min back end ratio has to be the same as front end ratio. It cannot be 8%, has to be more than or equal to 34%.
Anyway, you should be fine even with a higher ratio of 45% or more as long as you have a DU approval. I don't see any need of concern.
- wunderwomin
- Contributions:3
Hi there,
Just to piggyback on the OP's question, I am waiting for the seller's bank to approve my offer (it's a short sale) and with the anticipated payments, my front-end ratio would be 34% with back-end at only 8%. My credit scores are 695, 705, and 722 and I only have enough cash for down-payment and closing costs (no reserves). Is that 34% going to be a problem for FHA? My loan officer doesn't see it as a problem at all, but how is that possible?
Just to piggyback on the OP's question, I am waiting for the seller's bank to approve my offer (it's a short sale) and with the anticipated payments, my front-end ratio would be 34% with back-end at only 8%. My credit scores are 695, 705, and 722 and I only have enough cash for down-payment and closing costs (no reserves). Is that 34% going to be a problem for FHA? My loan officer doesn't see it as a problem at all, but how is that possible?
- Rohit Mohan, "MortgageGeek"
- Contributions:100
As long as you get a DU approval, you should be good to go. In other words you might be able to get aways even with higher than 46% front end
- Tim Storm, "SoCal FHA VA Lender"
- Contributions:31
As mentioned in other answers, Automated Underwriting Systems (AUS) will allow for a higher front end ratio. The highest front end ratio DU will accept on an FHA is 46.99. Once you hit 47%, you will get a Refer (Decline). Backend can go to 56.99, but many lenders cutoff at 50%, or require the borrower have "compensating" factors in the file.
- David Stein, "Military Loan Expert"
- Contributions:315
It can be done over 31%. I just closed one over that. Email me with any questions. I can go LP for you instead of DU
- Brian Baker, "The Baker Team"
- Contributions:37
31% front end ratio applies to manual underwriting. Depending on the strength of the file (credit, reserves, loan to value, etc), the automated underwriting system (AUS) will often allow ratios that exceed 31%.
- Wayne Brown, "SDMortgagefinder"
- Contributions:1433
Merely a guideline.....like so many have written depending on factors such as credit and liquid assets.
Good luck.
Good luck.
- Greg Cowart, "Roseville Loan Guy"
- Contributions:448
No, it's not an absolute. That number is only a guideline for "manually underwritten" loans. The vast majority of FHA loans, at least in my experience, are underwritten by an AUS (Automated Underwriting System) to FHA's guidelines/tolerance. When underwritten by an AUS, that 31% figure is meaningless and can be thrown out the window for approval purposes.
Of course this doesn't mean it will always be approved, only that it CAN be (and almost always is if everything else in the file is OK).
Let us know if you have any other questions...
Sincerely,
Greg
Of course this doesn't mean it will always be approved, only that it CAN be (and almost always is if everything else in the file is OK).
Let us know if you have any other questions...
Sincerely,
Greg
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3428
Oops, Sean I missed that it asked about front. I do have a 45/56 closing tomorrow, but you are right, can't think of any 56/56 in recent memory.
- Sean Ogilvie, "California Mortgage"
- Contributions:173
Justin, have you seen a front end ratio approved that high at 56%? I think you meant back end ratio ;)
If you can do front ends to 56 I can send some referrals your way. :)
If you can do front ends to 56 I can send some referrals your way. :)
- George Raymondo, "The Loanranger"
- Contributions:144
There are several things that are considered regarding ratios. How much debt you have, reserves after closing, credit scores, etc. Borrowers with less debt or higher credit scores can be pushed much higher. I see front end ratios in the area of 36% or even much higher all the time. Remember, not everybody fits in the same shoebox.
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3428
It is not unusual to see ratios as high as 56% approved on FHA. If you are near 31%, highly unlikely you have anything to worry about.
- Sean Ogilvie, "California Mortgage"
- Contributions:173
There are exceptions. Most lenders use an automated underwriting system that would allow a higher front end ratio with compensating factors such as good credit.
- Clay Branch, "Georgia Loans"
- Contributions:7839
Exceptions. What are your estimated front and back ratios, credit scores, down payment % and post closing asset position?
is the 31% front end ratio for fha loans an absolute necessity or are there exceptions?
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.