Should I be worried about my mortgage being approved?

Question

My credit score is over 700, my mortgage will be about 1246 a month, I make about 3300 gross, and I pay about 500 dollars between car payment and student loans. I have about 20 grand saved up in the bank. My mortgage guy told me on Tuesday that he submitted the loan to the underwriter on Tuesday and that I should hear from him later that day or tomorrow for the clear to close. Its now the end of Thursday and I haven't heard anything at all! I don't know why but I'm worried this whole thing will fall through. THe property is only 116K by the way, and I plan on putting down 10 percent down payment.

I wanted to add that I already paid 5K as a deposit. Am I worrying needlessly? Why hasn't he gotten back to me?

I actually have taken on a second job to help with expenses, yet I can't document it in my mortgage because I just started it in July, but it will give me about 400 extra a month, and yes the mortgage includes taxes, it is a co-op. It includes gas, water and heat. I have to pay for electricity and cable. I'll be living alone.

Even more details: It includes mortgage plus maintenence and PMI. The rate is 7 percent (cuz it's a co-op)

Answer 1

That depends on good of a job your mortgage person did when he/she submitted it. (Hehe) It looks like you have your assets, a decent score and you are putting some funds down. That payment sounds outrageous for that loan amount. Unless it includes taxes, insurance, mortgage insurance, HOA fees, etc. Good grief! What is the interest rate? If you are going full doc, you should NOT be paying more than 7%. Don't worry about the underwriters. They take a LONG time because they have to be sure. You should get approved. Good luck...

Answer 2

They are probably looking for an exception because of something called DTI. (Debt to Income Ratio). it's a percentage that's based on : (all debt appearing on credit report + alimony, child support, 401k loan payments, etc) / gross monthly income.

so: ($1246 + $500)/3300 = 52.91% The target would be less than or equal to 35%. There are exceptions to this, of course. Typically when the DTI is >50% you get dinged in the form of a higher rate AND the underwriter must grant an exception.

Caveat: if your student loans are presently deferred and will be for the next 12 mos or so, then they can ignore the payments on the student loans when figuring out the DTI

Answer 3

That leaves you about $900 a month net hopefully the mortgage amount includes taxes or you will have problems. Lets figure out of the $900 At least $100 a week in groceries that leaves $500. Electric $100 a month we are down to $400. Gas and Insurance $200 leaves $200 Water and Sewer another $75 that leaves $125. Cable and internet $100 Leaves $25. I believe they are thinking that your income will not cover the expenses and we have not included maintenance and heat. At approximately 40K a year to be honest this house and mortgage associated with it is to much for your income. Tell me at least it is not an ARM?

Answer 4

You are probably worrying needlessly. But why not give him a call and see what's happening? It might just be that someone in the process is on vacation or something.

Answer 5

Don't worry.

Answer 6

yes, you should be approved.