Fixing files and saving the day…comes standard issue at Aceltis.
Another snag in the road. Got the property locked up and under contract at a great price. Problem now is the Long Term Disability income one of the clients has turns out NOT to be LONG TERM. That means we can’t use the income. Less income means DTI ratio goes up. It goes up so much the DTI goes right through the allowable threshold! Now what? There are some options if you come into this kind of scenario.
1) Switch to an FHA loan and have a co-signer (additional MI payment makes this less attractive option)
2) Find a lender who allows Conventional Non-occupying co-borrowers (we have it!)
3) Remove the co-borrower; by removing them (since they have no income) we also remove their debts. Less monthly debt = lower DTI. In this case we’ve lucked out because the primary borrower has enough income to qualify. And since the co-borrower is gone their debts are gone too.
VIOLA! BACK IN BUSINESS!