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Purchasing with Fixed Income.

I started receiving tax free retirement pension and want to purchase a condo. My income is $66k/annually, FICO 668. I know that for FHA uses gross income to calculate rations. Having only a net income due to the tax free income, will these ratios increase? by rose_bloomMIA88401 from Orlando, Florida. May 29th 2018 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

Your "ratios" don't increase, but your income might.. FHA will "Gross Up" your tax free income by 25% assuming you are not required to file a tax return, but the lender will need to verify that your income is tax free.. assuming it meets the guidelines, then your $66K annual becomes $82,500 annual. When lenders talk about "ratio's".. we're talking about your Debt to Income ratio. We add up all the minimum payments on your outstanding debt, add any child support, alimony, tax payments, or any other "Payments" that's associated with debt.. then we add the housing payment as well.. that number get's divided by your monthly income to come up with a DTI.. with FHA, you can go as high as 57%, but you might not get approved for that high a ratio with a 668 credit score. In all reality.. you should pick up the phone and call a local mortgage professional.. give them 5 minutes of your time and they will tell you exactly what you can qualify for.. no more guessing.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

May 30th 2018
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