Posted on: 19th Nov, 2012 01:10 am
I plan to apply for FHA 15 yr. fixed within the next few months. Purchase price is $85000. With the required 3.5% down that would leave the "balance" financed around $82000. When looking at FHA's required front end and back end ratios % (31 and .43), do lenders use the initial purchase price ($85,000) or the amount after the 3.5 is applied ($82,000)? Thanks.
Hi Jordan,
As far as I know, they will use what your payment will be. They are normally only a few bucks off what your actual payment will be.
Take care
As far as I know, they will use what your payment will be. They are normally only a few bucks off what your actual payment will be.
Take care
Lender on FHA Loan is going to take the $82,000 as your base loan amount. Then add in the UFMIP, which is 1.75% or $1,435, so your total loan amount is $82,000 + $1,435 = $83,435, the lender will base your payment on this amount. Your top end ratio would be your mortgage only, and the bottom or back end ratio would be your mortgage plus your debts. Most lenders can go over the ratios stated here. We can go up to 50% DTI. Good luck
Thank you Chris and Sara for your opinions!! That was really helpful :)