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Hi all,
My wife and I are looking at purchasing our first home, and I am trying
to figure out what we qualify for. The things that we have in our
favor are our strong income, good credit scores (710-750 FICO), and
pretty good history at our current employer (7 years for me, and 1 for
her). The things that will make it tougher to qualify are lack of a
down payment, a good amount of existing debt, and high ratios (front
and back).
So here are my questions:
1) What is considered as income? The reason I ask is that I
consistently earn 15% of my salary in bonuses and stock options (mostly
bonus), and the potential is there to earn even more (up to 40%). I would
like to have that extra 15% factored into the income calculations, but
I do not know the protocol on that kind of thing.
2) What is the max amount for back and front ratios that lenders will
accept? Even if they consider the options and bonuses as income, I
think our ratios will be around 34/44 for interest only loans and as
much as 40/50 for 30 year fixed loans. At least for the price range
that we're looking at ($650K+).
3) How much money will we likely need for closing costs and cash
reserves? Also, traditional banks like Wells Fargo demand a down
payment of 10% in addition to the closing costs. Is only paying
closing costs with no down payment even an option, or should we plan on
saving up for a couple of years.?
Thanks in advance for the help.
Lance
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