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Can we qualify for a cash out refinance if our combined DTI is 50%?

by j.smith294 from Magna, Utah. Jan 11th 2016 Reply


Corey Moser (cmoser)
#40 ranked lender in Utah - 16 contributions

The maximum debt ratio for a cash-out refinance is 43%, however, if you're using the funds to pay off debt; that can significantly reduce the overall debt ratio. You can email me directly or call if you have further questions. corey@aspenhillsmtg.com or 801-403-7351. Thank you.

Jan 11th 2016
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,933 contributions

First I would ask how you came up with your DTI.. if you calculated it yourself, then I would suggest you let a professional do it.. typically, most folks don't do it correctly and usually calculate high.. It's best to leave the calculations up to the pros.. Buy to answer your question, it depends on the loan product you're applying for and what you intend to do with the cash proceeds.. If you go FHA, you can go to 50% DTI, possibly higher, but your Loan to Value cannot exceed 85%, and you will pay mortgage insurance.. for Conventional, you're maxed out at 43% and your LTV is restricted to 80% for owner occupied properties.. lower if it's investment.. If you're intent is to pay off other debt with the proceeds, then so long as you close the accounts after paying them, the lender will remove the monthly debt from your ratio for qualifying purposes.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Jan 12th 2016
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