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FHA DPA WITH HIGH DTI-Need Lower Mortgage Payment
FHA Down Payment Assistance Loan With High DTI: Need Lower Mortgage Payment
A homebuyer in Indiana has had an initial FHA approval (with help for the down payment) and is now looking at various mortgage options as the estimated monthly payments are well in excess of what the borrower can afford.
Borrower and Property Details
- Purchase price: $275,000
- Location: Indiana
- Income: Documented retirement and Social Security income
- Credit: Prior auto loan charge-off
- Current financing: Preliminary FHA approval with down payment assistance
- Estimated payment: $2,705 per month
- Alternative quote: $2,571 per month with two discount points and approximately $9,000 in seller concessions
- Preferred payment: $2,000 or less, with $2,400 as the upper target
- Cash to close: As low as possible
Financing Challenges
The current lender states that the debt to income limits mean the borrower can only use one of the down payment assistance programmes.
The property is listed for conventional financing and will likely need repairs to satisfy FHA and USDA inspection criteria.
Questions for Mortgage Professionals
- Are there any other FHA, conventional, or USDA loan options which could reduce the monthly payment and the up-front costs?
- Could other down payment help schemes, grants, or seller concessions make the property any more affordable?
- How would an unpaid auto loan from the past affect the loan approval? Would the property be eligible for FHA or USDA financing if the seller does the requisite repairs prior to closing? I’m looking for some advice on the best financing options to keep the total monthly housing payment (including taxes, insurance, mortgage insurance and all required help loan payments) at or below $2,400.
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1 Reply
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Dear Melissa,
Thank you for reaching out to Gustan Cho Associates. We’re glad to help you explore mortgage options for the home at 374 N Walnut St in Columbia City, IN.
Our goal is to keep your total monthly housing payment around $2,000, and ideally below $2,400. We’re also looking for ways to lower your closing costs.
We work with borrowers who may have high debt-to-income ratios, credit challenges, or need manual underwriting. We partner with several wholesale lenders and can offer FHA, VA, USDA, conventional, and alternative loan options.
Here’s what our team will review:
- Monthly payment: We’ll look at loan programs, interest rates, discount points, taxes, insurance, and any repayment needed for down payment assistance.
- Cash to close: We’ll check for down payment assistance, eligible grants, and seller concessions that could help.
- Eligibility: Conventional, FHA, and USDA financing are available, and we’ll also consider any needed appraisal repairs.
- Credit and income: We’ll review your retirement and Social Security income, current debts, and any past auto loan charge-offs. Before we look at financing options, we’ll make sure the property qualifies for the right mortgage program and that the payment fits your budget.
To get started, please send us your current Ruoff Mortgage Loan Estimate or payment statement, your preliminary approval, and any property details you have. After that, we’ll set up a secure way for you to send your mortgage documents. Our assistant Marga Jurilla and the rest of our team will support you every step of the way. Once we review your information, we’ll discuss financing options that fit your needs, provide estimates of your monthly payments and cash-to-close, and guide you through any additional underwriting or property requirements. We’re available during the week, as well as in the evenings and on weekends.
We look forward to helping you and your family with your new home purchase.
NMLS 873293
Branch Manager | Gustan Cho Associates
A DBA of Coast 2 Coast Mortgage Lending, LLC
NMLS 376205
https://gustancho.com/gustancho.com
GCA Mortgage | Mortgage Experts With No Overlays
Whether you have gone through bankruptcy, divorce or you are a first-time homebuyer, Gustan Cho Associates are experts in difficult loans
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