How to NOT get denied to buy a Minnesota home when your debt-to-income ratio appears too high
It’s a common problem that I see for today’s first time home buyers.
If you aren’t selling with a lot of equity, you likely don’t have a lot saved for a down payment and will be financing most of the home purchase including the closing costs and maybe even one of the popular 100% home loan programs here for a Minnesota home.
We see it often where one person who wants to buy can only get pre-approved for a $100,000 or $150,000 home.
We have to break it to them that they are likely going to be buying a condo or a townhome, or s home that needs a lot of work which a lender may not lend on.
It’s possible that if you buy a small home outside or the cities that may fall in the price range also.
This is where we recommend that you get a good income co-signer, a significant other, spouse or some more household income so that you can get a pre-approval for a higher amount.
An amount more like $300,000+ so that you can compete with more or the first time home buyers as this market has very low inventory and is very hot and houses sell very quickly.
You will be able to get a bigger house and have more options for more cities to live in.
You will win on more multiple offer situations in general and have stronger pre-approvals with your offers.
The pre-approval will factor in a monthly payment that you can afford and all monthly liabilities and debts that you have.
We have seen edits approving people with 50% type debt-to-income ratios and the focus has probably changed some from what they do or don’t count and there is also a front and back ratio.
You will want to take to an experienced mortgage person to understand how it works and if you qualify.
When you are in the pre-approval process you will he sending over paperwork with bank statements and pay stubs that factor in all of the numbers.
Adding another co-signer will give you more flexibility and offer you far more options in homes by factoring in the co-signers additional income.
If you are a motivated buyer and you have spoken to your co-signer than feel free to click the motivated buyer link on my website and look at how the programs work then message me and we can chat about your unique situation.