Posted by Dwight Gordon on February 27, 1999 at 06:28:16:
In Reply to: Debt ratio information posted by toad on February 02, 1999 at 19:13:36:
I am in the mortgage business in Virginia, and thought I would pass this along.
Loan officers don't sent debt ratios, investors develop loan programs with guidlines, and these guidelines may or may not be "stretched", depending on their rules, and other aspects of your case.
One of the most popular first time Homebuyer programs which requires very little down is the Gov'ts FHA program. Here, the ratio rule is 41%, but 45% is not uncommon, and it can go even higher.
Being able to go higher is the result of electronic underwriting, which is the follow-on to credit scores, which you mentioned. A Credit Score is a single number which sums up what is in your credit file. Each of the 3 main Credit Bureaus develops a different number, but in theory, they should be close.
With electronic underwriting, your whole mortgage approval is done by computer !! [Frightening, but sometimes giving a better result than a human would, especially with a good credit history.]
Work with someone you can trust in home financing. Ask to see references. Make sure they take the time to explain things thoroughly.
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