Tue 20 Mar 2007
How can I get a bigger home loan?
Posted by lizweston under Credit & Debt, Q&A with Liz
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Dear Liz: I’ve heard that some lenders offer mortgages where the payments represent 60% of the borrower’s income. I am in over my head financially because of recent hospitalizations and as a result have been late on my mortgage. I’m currently on a payment plan that is difficult for me. I have been juggling expenses every month and cannot catch up. I’m trying to find a second job but no luck at this point. I don’t want to sell my home nor do I want to lose it, so can you send me a list of lenders that allow 60% debt to income ratios?
Answer: When the mortgage market was booming, there were a few lenders that signed off on loans that ate up 50% to 60% of the borrowers’ monthly income. But those borrowers typically had sterling credit and substantial resources. That’s clearly not your situation.
Your late payments have substantially damaged your credit score, which means lenders aren’t going to cut you much slack. You might want to try your current lender again to see if lowering your payment is possible, or work with a seasoned mortgage broker who can help you evaluate your options.
It could be, though, that you simply can’t afford your house. If that’s the case, it’s better to sell now before a foreclosure makes your credit even worse.
