Notes From The Mortgage Insider

This week I will bring you Part 2 of examples of how an FHA loan may be the best mortgage solution for your clients.

I was working with a client who wanted to get pre-approved to buy a house. He was recently separated from his wife and was paying child support and spousal support. He wanted to buy a house for around $350,000 and put 10% down. I first looked at a conventional loan but could not get him to qualify because of the child and spousal support payments pushed his debt to income ratio over the guidelines. However, FHA will allow you to deduct the spousal support from the gross monthly income instead of showing it as a debt. By changing the spousal support from a monthly debt to a deduction from his monthly income, it reduced his debt to income ratio from 51% to 44%! It obviously made a big difference in what he could qualify for.

Have a wonderful week!  Margie