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This is something that just popped into my head tonight, and it's late so I hope it makes sense. 

So this whole time My GF and I have been wanting to purchase a house and wanting to both be on the loan. We just figured, $70,000 is going to get us a better home than a person making $50,000 would (my projected salary for the year, so us together might be more around $75k) But I'm second guessing that strategy now. 

So I understand what DTI is and i understand the banks would like to see that percentage as low as possible. My GFs debt is pretty bad right now, but some of it, I'm not sure about...like, she's in charge of the cable bill. Is that going to effect her DTI or both of ours? She's in charge of paying it but we live in the same house. 

Guess what I'm saying/asking is, with both of us, we'd be looking for a loan with a salary of $70-$75,000 and about $1,100 monthly debt. And with just me, I'd be looking to get a loan with a salary of around $50,000 and about $2-$300 in monthly debt. Plus last time we checked, My Credit Score was around 650, whereas hers was around 600. 

Would we be better off if I just did the loan myself? 

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52 minutes ago, holt_bruce81 said:

This is something that just popped into my head tonight, and it's late so I hope it makes sense. 

So this whole time My GF and I have been wanting to purchase a house and wanting to both be on the loan. We just figured, $70,000 is going to get us a better home than a person making $50,000 would (my projected salary for the year, so us together might be more around $75k) But I'm second guessing that strategy now. 

So I understand what DTI is and i understand the banks would like to see that percentage as low as possible. My GFs debt is pretty bad right now, but some of it, I'm not sure about...like, she's in charge of the cable bill. Is that going to effect her DTI or both of ours? She's in charge of paying it but we live in the same house. 

Guess what I'm saying/asking is, with both of us, we'd be looking for a loan with a salary of $70-$75,000 and about $1,100 monthly debt. And with just me, I'd be looking to get a loan with a salary of around $50,000 and about $2-$300 in monthly debt. Plus last time we checked, My Credit Score was around 650, whereas hers was around 600. 

Would we be better off if I just did the loan myself? 

Lenders don't count utilities as part of your debt. Even in the event that they report on credit (the state of Wisconsin is big on reporting utilities for some reason, for example), the lender should exclude it. Likewise, I've never seen a lender include daycare costs. If it's not on the credit report or some sort of government payment plan (such as a tax repayment plan, which is hit and miss with regards to whether the underwriter will be competent enough to catch it) or some sort of garnishment or unreported credit lease (think solar panel lease) it's unlikely to be in your debt. There are probably others, but I'd have to think about it. Those are the ones that popped for me.

It's very important that you be mindful in taking these kind of things into consideration when determining what you can afford. Based on your dti numbers, you'd get approved for a house with a monthly payment much higher than you'd want, so keep your range tight. 

Fwiw, at 600, you're going full on portfolio loan, probably through a credit union (they tend to have more flexibility,). Agencies aren't buying that loan, and I know of very few investors who will. So if her credit score stays at 600, you likely won't have a choice on whether she can be on the loan. 

Side note, I was in a similar situation with my gf and put the loan only in my name. Her credit sucked, mine is great. We didn't want to max the loan anyway (we didn't even max on my income alone) and her credit would have killed our rate, so there was no reason to have her on the loan. Would have been detrimental

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Actually thinking about jumping back into the market and selling our house to find a newer/bigger place. We bought a place close to downtown because my wife was using public transit to get into the office every day, but for a year and a half now, she's been working from home fulltime, so that reason isn't valid, and theoretically during that time, the value of our house has gone way up. I'm  checking with our realtor to see what her thoughts on comps would be for it. But, we weren't able to do 20% down on this, so we're still at least two years away from being at that 80% of original loan point and done with PMI, so that's another reason we're thinking of looking and with interest rates down slightly, hopefully that'd save us even more. The only thing I'm worried about right now is what sort of value we can get on our house due to Covid, but that also means what sort of value can other people get on their houses, so maybe it would offset.

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1 minute ago, The Gnat said:

Actually thinking about jumping back into the market and selling our house to find a newer/bigger place. We bought a place close to downtown because my wife was using public transit to get into the office every day, but for a year and a half now, she's been working from home fulltime, so that reason isn't valid, and theoretically during that time, the value of our house has gone way up. I'm  checking with our realtor to see what her thoughts on comps would be for it. But, we weren't able to do 20% down on this, so we're still at least two years away from being at that 80% of original loan point and done with PMI, so that's another reason we're thinking of looking and with interest rates down slightly, hopefully that'd save us even more. The only thing I'm worried about right now is what sort of value we can get on our house due to Covid, but that also means what sort of value can other people get on their houses, so maybe it would offset.

If you're buying and selling simultaneously, the market forces basically cancel each other out on either end.  Unless you're moving up/down in house.

I would imagine that inventory is down at the moment.  But i don't know that for sure.

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9 minutes ago, theJ said:

If you're buying and selling simultaneously, the market forces basically cancel each other out on either end.  Unless you're moving up/down in house.

I would imagine that inventory is down at the moment.  But i don't know that for sure.

For Minneapolis/St. Paul metro area, it seems to be down slightly from normal this time of year, but not down massively. I feel like there are some locations where places are getting snatched up quickly, but in the suburbs they aren't moving as fast as a few years ago.

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1 minute ago, The Gnat said:

For Minneapolis/St. Paul metro area, it seems to be down slightly from normal this time of year, but not down massively. I feel like there are some locations where places are getting snatched up quickly, but in the suburbs they aren't moving as fast as a few years ago.

Inventory has been low the last two years anyway, so that's not totally surprising to hear.  The number of new builds has been down in general for a while, so stuff just gets snatched up quick.

When we bought last year, houses would go on the market and fly off within 1-2 days.  We sold ours in like 12 hours for over list.

As to how easily you're able to sell in your area, it just depends on the local regs around Corona and what people can and cannot do.

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Yeah, had a friend who just sold their duplex and bought a house, so seems like market is moving pretty easily, now a duplex will move faster than a single family, but doesn't seem to be completely locked down for it.

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  • 2 weeks later...
On 5/27/2020 at 4:02 PM, holt_bruce81 said:

This has probably been answered already so I apologize. But what is more important, saving for a house or getting your DTI as low as you can?

Keep going back and forth on whether or not I want to knock out my Student loan debt. 

I'd say pay off off the student loan debt but saving for a house now or later probably depends on how much you pay for rent and interest rates on the debt amongst a lot of other things.

After I bought my house I started paying off my student loans quickly.  I paused for a bit when the interest rate on my house was higher than my student loans but then I decided I might as well just pay them off.  That felt good and it was nice not having that money go out every month

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On 5/18/2020 at 10:16 AM, theJ said:

Inventory has been low the last two years anyway, so that's not totally surprising to hear.  The number of new builds has been down in general for a while, so stuff just gets snatched up quick.

When we bought last year, houses would go on the market and fly off within 1-2 days.  We sold ours in like 12 hours for over list.

As to how easily you're able to sell in your area, it just depends on the local regs around Corona and what people can and cannot do.

When my cousin was my realtor back in 2017, he recommended looking at homes less than 10 years old so I would start off without having much to worry about as far as repairs/remodels go, as well as not having to worry about any major expenses from things breaking down.  I ended up going with a house that was three years old at the time, and only had a military family renting for half of that.  

The day that it went on the market, I got the final viewing of the day, and it was a full days worth.  That was a Thursday.  Friday morning we put an offer on it, which the builder's son sent to the property owner as he was traveling.  Saturday morning it was accepted.  Up until we had the home inspection, I believe people were still able to view it as well if they wanted to and since it was winter and people were tracking in dirt, that was absolutely the case.  

The DMV market is probably pretty easy compared to most, since there are a lot of military families coming in and out for their job.

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On 5/27/2020 at 5:02 PM, holt_bruce81 said:

This has probably been answered already so I apologize. But what is more important, saving for a house or getting your DTI as low as you can?

Keep going back and forth on whether or not I want to knock out my Student loan debt. 

You'll never regret paying off a debt. Have yet to meet someone who said "man I wish I had more debt". 

IMO

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4 hours ago, The Gnat said:

Well, there goes my chances of selling my house for what it was worth, we'll give it a few days and see how things shake out, good job Minneapolis all around.

Are you up near Lake?

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