Question:

Can I reduce my housing expense to income ratio?

Answer:

Yes, you can. Different housing expense to income ratio limits apply to different loan programs and sometimes you could either convince the lender you can cope well with higher housing expense to income ratio available, or try to reduce it.

How to reduce the housing expense to income ratio?

Sometimes, if lenders want you to reduce housing expense to income ratio, applying with a co-borrower, or applying for option ARM with low initial payments can be used. Or, you could simply find a mortgage program where higher housing expense ratio is allowed (say, 30%).

Extending the loan term will reduce your monthly payment and housing expense ratio and will work for loans over less than 30 years.

If you are able to put large down payment, lenders tend to overlook the 28% housing expense ratio requirement.

The most effective way to reduce the housing expense to income ratio is the so-called temporary buydown. It is not always allowed, but when it is extra funds are initially placed in the escrow account to assist the buyer for the first several years of the loan.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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