Home Equity Loan

Would I be able to get an FHA loan for debt consolidation?

I have a $600,000 home with $450,000 in debt (currently 75% LTV). I have just under $100,000 in revolving debt (a lot on credit cards, had a bad business venture). I have a verifyable gross monthly income of $11,500. FICOs around 700. I basically want to get a loan for $550,000 so all my debt is in one single loan. I will not have any other debt after doing this? The problem I see if is I analyze by debt to income BEFORE the loan, there is no chance, but AFTER the loan, I fall well within the guidelines. The debt I need is $550k and the payment is simple to calculate using P&I. Don't see the problem calculating numbers. I have checked the max amount and I fall within the guidelines. I guess my main question is whether they will consider debt to income ratio before or after. If it is after, and I get about a 6.5% loan, my debt to income is 30% which is within their guidelines. HOwever, if they assess it before the loan, my debt to income is close to 50% which would put me out of range.

Public Comments

1. no, becuase you have to know what the debt is you need to know what your payment are.......
2. it all depends on the max loan for your area. Go to HUD.GOV and see how much the max is for your zip code
3. You could try getting a second mortgage. You don't need to roll it all into one loan. A second mortgage will have a slightly higher interest rate, but that is typical. The reason you shouldn't try to roll it into one is that the LTV will be above 80% and if you do that on only one loan, they can try to make you pay mortgage insurance, which is sometimes expensive. Call a mortgage broker, tell them you want a second mortgage for $100K to do some debt consolidation. They can help you.
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