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Old 08-10-2010, 05:29 PM
5 posts, read 33,057 times
Reputation: 14



I'm in OC, California and trying to refinance my house:

Property Value: $485,000
Loan: $380,000 (78%)
Current Payment: $70+ $450+$2042 = $2560 (insurance + prop tax + 4.875% payment)

I'm offered a 30yr fixed 4.375% (770+ credit scores) with a total of ALL fees of $1400.
New Payment: $70+ $450+$1892 = $2413 (insurance + prop tax + 4.375% payment)

Income: $5000/mth
New Debt to Income: $2413/$5000 = 48.26%

I do not have any other debt since everything else paid off (cars, credit cards...). I do have a saving account enough for 10 payments.

The loan officer told me that the DTI is too high and may be rejected by the underwriter but recommended me to go ahead and sign the paperwork. If my application got denied, I would lose my $425 for the appraisal.

Should I go on and sign the papers or it WILL be denied so it's not worth it.

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Old 08-11-2010, 08:24 AM
Location: Plano, Texas
1,676 posts, read 6,334,056 times
Reputation: 684
Before you do that, ask your loan officer if he/she ran your loan through automated underwriting. It will let you know if you can be approved to that DTI. Most loans with DTI's over 45 are declined, but with high FICO scores, assets and lower loan to value it is possible to get approvals to 50 DTI. Before you proceed, have the loan officer send you the findings so you can see whether you can be approved with that DTI.

By the way.. i am surprised the loan officer hasnt already ran through DU(automated underwriting)
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