03
Jul
Jul
Loan approvals
Well, I just got an email from a loan officer regarding what kind of loans can be approved. She states that if a loan isn’t in Jumbo category, but can go Fannie Mae, there can be a 57% back end ratio.
What that means for non-lender people is that all of your debt payments including cars, credit cards, installment payments, can’t add up to more than 57% of your pre-tax income.
That’s freakin’ scary. In my opinion, there is no way that 57% as a back end ratio is sustainable over the long term. 40% can be done with control, 45% can be done with sacrifice, but 57% is way outside anything I’d ever consider realistic.
If Fannie is considering that kind of ratio acceptable, we’re looking at a lot more future hurt than what we’ve seen so far.
