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getting approved for a 203K loan


TheDogDays
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Is there any way to get a mortgage for more than 28% of your gross monthly income? His (my husband) total debt is only $700, spread between 2 CCs. No car loans, student loans, etc. We're trying to get a 203K FHA loan for about $160,000 total. We were already pre-approved for 170,000 for a USDA loan but cannot use it for this house because the furnace is totally dead and there are a few other issues. He doesn't have anything negative on his credit report in the last two years. The problem is, we only make about 40,000/year. At 28% we'd only qualify for around $100,000. We've been paying $1450/m for rent for 2 years with no problems, which is more than our PITI would be for a 150,000 loan. Would they take that into consideration??

We're really in love with a house and desperately trying to find a way to make it work! Any advice, ideas would be great.

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http://mortgage-x.com/calculators/prequalifier.htm

I just ran a quick check for you and it looks like depending on the property's taxes and insurance costs you could be approved for around 130-155k. Are you sure you have no other debt than the two cards? I just assumed they ran ya'll around $50 a month.

I was going to to a 203k loan on a home that I really liked. I went through alot of the process before backing out. It's alot of work and alot of repsonsiblity. You can hire somebody to be like your contractor and do alot of the work for you but still hard. I guess it would be rewarding and fun if you had the time though.

I know sometimes you can use your rental history to show you have a history of on-time payments but I'm not sure if it can be used to show you can afford a certain amount of house.

Maybe Charles or Denita will offer some of their usual helpful advice. :)

Good luck and be careful!

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Thanks for the info! He definitely only has $700 debt. I have a bit more ($700 plus another $400 in cc) but we weren't putting my name on it because I have no income anyway. I actually just paid one of his cards off so now it's just one card and runs us about $22/m if we make the minimums. We could probably pay it off but I'm not sure it would help us that much because then he doesn't have any debt/utilization at all.

The 203K definitely makes me nervous but the house is in pretty good shape, just needs furnace and some minor repairs.

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Depending on the other factors about your situation, you can probably get approved for a lot higher DTI than the 28%. Just be careful to not over extend yourself.

There are two versions of 203K. One where the repairs are <35K and one where they are over. For the one under, like the furnace replacement, you should be able to do all of the work by a local contractor)

If it is just the furnace issue, or things like it that would be done by a contractor, I would suggest that you just apply-go for it.

Charles

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