In need of a letter, rock and a hard place - Posted by Kurtis

Posted by Walt on July 16, 2002 at 20:05:42:

The debt to income ratio is figured by lenders to make sure that you don’t overwhelm yourself in debt and thus default on their loan. You take your income, multiply it by the ratio the lender prescribes ie 38% and subtract your other payments. Example:

$3,000 Your monthly income
x.38 =

  • 520 Car payment
  • 100 Credit cards
    = $520 available for house payment. In this example you would only qualify for about $55,000 to 60,000 depending on the interest rate. I’ve seen DTI ratio’s from 38% to 65% depending on the program. for borrowers with extremely high Fico scores, I’ve seen no ratio loans. Hope this helps.

In need of a letter, rock and a hard place - Posted by Kurtis

Posted by Kurtis on July 16, 2002 at 16:02:13:

I am a new invester,whom just bought thier first property last month. It is a rental with 2 units and is owner oquppied. I would like to buy a forcloser and rehad it. How ever I am not getting any help from my realator becouse I do not have a prequalafication letter.I have contacted a hard money lender whom would only be inrested If I had a deal in hand. I have vary good credit but too much det for a convecanal lone …any words advise …please kurtis

Re: In need of a letter, rock and a hard place - Posted by Ellie (NYC)

Posted by Ellie (NYC) on July 16, 2002 at 16:23:24:

Hi Kurtis,

I’m a newbie myself, so I apologize in advance if I am over-stepping my boundaries by responding to your post.

As a new investor who just bought their first property last month, let me first congratulate you! I have not yet made my first transaction…I am still in the reading/learning stage. However, after reading your post I wanted to just give you my two cents. You did ask for ANY words of advice, right? :slight_smile: Not just experienced words of advice! So here goes:

I know nothing yet about dealing with realtors or pre-qualification letters or forclosures or rehabs first-hand. I do, however, know a whole lot about debt!!! :slight_smile: So in order to avoid the problems associated with conventional loans, I am starting out with “flips.” Have you thought about getting into flipping properties for awhile in order to first generate the cash to then get into foreclosures? From the many posts I’ve read here and the books I’ve read independently, I believe that flipping seems the best bet for those of us who do not have cash savings or good credit. Try searching the archives with the keywords “flipping,” and “flips.” That’s how I got most of my information on the subject.
I hope that helps. If not, well then “happy investing” whatever you do!


-Ellie (NYC)

Re: In need of a letter, rock and a hard place - Posted by jeff

Posted by jeff on July 16, 2002 at 16:07:31:

what is your debt/income ratio?

there are multiple brokers on this site that may be able to help with a little info like debt/income ratio and FICO score.

another nyc-er - Posted by Rob * R (NYC)

Posted by Rob * R (NYC) on July 17, 2002 at 11:25:24:

Hey Ellie,
I’m in NYC as well, in Astoria, Queens. I’ve yet to do any deals, and like you, I’m in the reading/learning stage. Flips definitely sound like the way to go, at least in the beginning. Get in, get the check, get out.

I’m planning to check out the NYC REI club at their next meeting in August. Are you familiar with the group?

I’d love to speak with someone else getting started in NYC. Maybe we can share notes?