Here’s a very useful solution that I’ve used successfully on borrowers that have high debt to income ratios on conventional loans.
Last year Fannie Mae came out with a 45% limit on debt to income ratio if the loan to value ratio is over 80%.
If you are over 45% on your debt to income ratio – you won’t be able to get a conventional approval.
Here’s one possible way around this – lender paid mortgage insurance.
…With lender paid mortgage insurance – we pay your mortgage insurance in a lump sum up front.
This way there is no monthly mortgage insurance.
No monthly mortgage insurance means a lower debt to income ratio!
…You will want to make sure getting rid of the monthly MI will be enough to push you under the 45% limit.
If so, then this simple change could be your key to loan approval!
That’s it for today. I hope you have a good day. Thanks for reading this email!
Brett
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