Home Buyers; Cosigner is allowed with FHA Loans
If you have high debt to income ratios and you cannot qualify for a home loan, a non occupant cosigner is allowed with FHA loans. A non occupant cosigner is allowed with FHA loans if they qualify with credit score and debt to income ratio requirements.
High Debt to Income Ratios
There are many cases where an individual would not qualify for a home loan due to high debt to income ratios. The maximum debt to income ratio mortgage loan I can qualify a mortgage loan borrower is 56.9%. However, many qualified home buyers exceed this ratio because they cannot document their income. Folks in the restaurant industry, especially, are often paid in cash and do not declare their cash income so the lender cannot use the undeclared income.
Self Employed Borrowers
Another group of individuals who often have high debt to income ratios are self employed individuals and business owners. Self employeed individuals and business owners often use the tax loopholes in writing expenses off and often get away with declaring less income in order to pay less taxes. This is great because it saves the person from paying more taxes but it is a major problem when it comes to applying for a mortgage loan.
Home Loan after Bankruptcy and Foreclosure
Other cases where the debt to income ratio problem comes in is when a married person has a bankruptcy or foreclosure but the other person does not. The married person without a bankruptcy or foreclosure can qualify for a mortgage loan but the married person with the bankruptcy or foreclosure cannot be on the loan and therefore their income cannot be used in qualifying for a mortgage loan.
Child Support Payments and other Debts
Other typical scenarios include mortgage loan borrowers who have child support payments. Two, three, four kids can take up a chunk of a person’s gross monthly income and although not every dollar is used on the kids, the lender considers every dollar awarded as child support as a monthly liability. Folks with high monthly child support payments often run into high debt to income ratio problems and the only solution is a cosigner for them to qualify for a mortgage loan.
On cases like the above, you would need a cosigner. A cosigner is allowed with FHA loans. The cosigner does not have to be an occupant but do have to qualify with the lender;s credit, and income guidelines.
If you have high debt to income ratio issues and have questions, please contact me at 262-716-8151 or email me at email@example.com. You can also subscribe to our newletter at www.gustancho.com .