Long story short here- We bought a house 2 years ago (almost to the day). We are FHA and have an interest rate of 4.75 for reasons that a bank screwed us over and had to rush in with another lender... Anyways we are trying to refi our house now to add a pool on. We live in FL. We have an estimate at 3.5% for our new interest rate which as you can guess, we are excited about. We are trying to do a pool refi (where they add the value of a pool on to your house prior to actually having said pool to give you more equity to borrow against). We just got a call from our lender today saying they could not give us a loan because our debt to income ratio was too high. So my questions... Debt includes only debts, not bills? If so, our debts are currently 1600 Mortgage, 700 in vehicles, 300 in Student Loans, and approx 350 in credit card debt that we acquired at interest free rates for our new AC unit and refrigerator. Call it 3k a month. Between my wife and I, we bring home 6600-6800 a month. So they said our DTI was too high but I'm calculating it right at 45%. And I know the rule is banks won't give mortgages after 43% typically but if you take off our mortgage, because we're essentially applying for a new one... Our DTI comes out to 20%. So can someone explain to me if I am missing something? The thing that gets me is if we borrow 60k from the refi program and drop our loan term to 20 years it will literally increase our monthly payments by $60 because of the 1.25% decrease and the loss of PMI.
Thanks in advance for the help! Edit: Am I supposed to take this DTI as Pre-tax or post tax? because if it is Pre-tax/401/healthcare then our gross is approx 8100 per month.
Submitted September 10, 2016 at 06:00AM by Tballs51 http://ift.tt/2cMdNJs personalfinance
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