Lenders – Is Your FICO and DTI Combo Killing Your 1st and 2nd Combo?

We’ve seen an uptick lately from our conventional mortgage peers whose borrowers are in jeopardy of not getting a loan when the combination of the borrower’s FICO and DTI kills their 1^st and 2^nd combo. Last week, we funded one such scenario.

The scenario unfolded as follows:

• 1^st mortgage – at the high balance limit for the county
• Credit scores were below 720
• DTI was above 40% needed for the 2^nd mortgage and below 45% needed for the first mortgage, even with our 2^nd

We were able to fill that gap and this can work for owner AND non-owner.

• LTV  – CLTV needs to be 70% or less.

These scenarios are not uncommon and many lenders can still close the loan for their borrower with a private 2^nd. And, once the borrower’s DTI and/or FICO improves the borrower can refinance out of our 2^nd with a conventional loan.

Give us a call- 415.883.2150