How to get a semi-conventional loan?

Question

I got pre-approved for a mortgage, but it isn't enough for the house I want to buy. It was calculated using 28% of my monthly income. I'm assuming they're just following the rules so they can sell it to Freddie Mac. I'm planning on renting out rooms to help cover the mortgage and I can afford a larger purchase, but obviously the bank is held to its rules. I'd like to get a traditional 30 year fixed mortgage if that's possible.

Where should I go next? Credit Unions? Other banks? It's not a straight-up investment property, and it is my first home purchase and a primary residence.

Joshua Cetnar · Answer

@Bryan Otteson

No other significant bills really. Currently living at home. I have zero student/car/credit card loans or debt so I don't have any reason to believe it's a DTI issue. The only thing that makes sense is my short credit history of about 4 years, but my credit is excellent. Also this is my first home purchase and I don't have any installment-type credit history.

Bryan O. · Answer

Sounds like it might be a DTI issue rather than the standard 43%. Do you have other bills? Heavy student loans, car payments, credit cards, etc.? That may be where your bottle-neck is.

You can check for banks that will offer commercial loans for residential properties. They can lend based on what they want to do rather than stuffing you into the Fannie/Freddie machine.

Joshua Cetnar · Answer

@Logan Drew

@Upen Patel

Thanks for your interest. I am looking in the 170k range with a 20% down payment. The bank qualifies me for a $730/month payment on approx. $2600/month income as a grad student. The income is steady though, but has only been coming in for about 2 months so far.