Expert: Joe Montgomery - 6/13/2007

Question
Hello, I am in desperate need of a bill consolidation loan to pay off about $30k worth of credit card debt.  Last I checked, my credit score was around 660.  I have no late payments, been on my job for 9+years.  my problem is my DTI.  Currently, depending on how you calculate it could range from 55-65%.  I have lived in my current home for 7 months and I have about $40k worth of equity in it. Any suggestions?

Answer
You will most likely have to wait an additional 4 or 5 months to use the equity in your home as most lenders require you to use the purchase price of your home as a value until you've lived there a year.
In addition to that-- most people's DTI is actually 50-65% in reality because of their Net income.  In your case, a No ratio, or No Income Verified loan sounds like the best option.  The lender uses your equity and your assets to make you a loan, and either does not calculate your DTI, or you state an income amount that would give you the DTI you need to qualify.  This will obviously mean a higher interest rate, but you would most likely qualify for the bill consolidation you are looking to get.  I hope this information helps you.