San Diego

[MathewD]

Hi there! So my fiance has qualified for a mortgage on her own and now we are thinking about trying to add me to the loan to increase her loan approval from $200 to $250K to get us above this less than desirable price point. Here is the catch though.... My credit is about a 600'ish and the only full time job I have had in the last two years has been since August 2011, otherwise a full-time student and collected unemployment, with close to $20K taxable income.

Now I realize that I am leaving out DTI and probable some other pertinent information. Are we being completely unrealistic in thinking that I could be added to increase the loan amount considering my job history?

Any information would be greatly appreciated!

[kmfk]

Others can chime in.  I am not an underwriter - but from my understanding, an underwriter would want to see verifiable income and steady employment.  Unemployment benefits would not be considered as income because it is a temporary benefit - it can and will run out.

So, with out a solid employment history and little income ( if any outside of unemployment ), you could still be added to the loan, but chances are you would actually just be increasing the combined DTI ratio and lowering the overall approved loan amount.

Again, you left some big pieces out of the equation like your current DTI, how much of that taxable income is from Unemployment, etc..  But in your given situation, I find it unlikely that you would increase the allowed loan amount.

Good luck with the job market and home search.

[MathewD]

You're right, I did leave out some information. My current dti is 34%, assuming I did the math right. I do now have a job but I have only had it for approx 6 months. Any thoughts? Thanks

[RRW]

The only way I would even consider it is if you had zero consumer debt, a better or somewhat equivalent credit score as your fiance and some type of explanation of why you were not working prior.

Were you on unemployment and going through a vocational program approved by EDD? Otherwise being a fulltime student on unemployment is a no no. How long have you been in the field of your current position? Ex. a carpenter in the business for verifiable years that changed employers. Usually u/w will want you at the same job for 2yrs unless there is a good reason.

Also LTV will come into play, the lower the better, do you have reserves to add some compensating factors to the deal, if your income is more than your fiancés they will consider you the main bwr which may hinder her deal. I would stay clear of FHA loans and save up a little more and avoid the upfront MI and monthly mortgage insurance.

In order to calculate DTI banks work a little differently. It would be a combined DTI if you add your self to file.

Front end DR should be at 28% and usually no more than 32% to make sure YOU can afford your payment.

Your payment will include the following:

Principal and Interest Payment based on loan amount and rate.

Taxes usually calculated at 1.25% to include any additional assessments

Home Insurance get a quote depending on property type and location but figure about 100.00 a month

HOA if any

and PMI if required by lender.

Then when you have this number take monlty income of both bwrs and divide= Ex. 1350.00 (total payment) divided by (income) $4800.00 =your  front end dti of .28%

Monthly income is usually calculated like this 2011 W-2 income plus current YTD pay stub on a 52 week basis.

Back end DTI usually can go up to 45% take the total monthly payment, add in all you consumer debt including installment loans and divide that number by total income. 

Ask your loan officer to run the scenario based on that banks guidelines.

This is my advice and I have worked in u/w, wholesale account management, correspondent and wholesale loan processing, compliance and secondary marketing.

Good luck.