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DTI

I was denied for a 30-year fixed mortgage because of DTI, twice; in August and December 2018. I have no late payments on my credit, FICO is 680, I make $85k/year, my total debt monthly is $4,600. I even paid off my student loans before I was denied again in December. Can anyone tell me what qualifiers go into DTI? How do I overcome this hurdled to get approved? by kuparine161 from Denver, Colorado. Feb 1st 2019 Reply


Dan Paladin (dpaladin)
#1 ranked lender in California - 561 contributions

Consumer debt that reports to the bureaus and the complete mortgage payment.That is used as a percentage of your gross income to come up with your debt ratio.45% is "normal"...though approvals can be with a much as a 50% debt ratio for conventional financing. FHA can go higher. Hope this helps shed some light.

Feb 1st 2019
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,620 contributions

I believe I replied to an earlier post, but regardless... you are not providing enough info to properly answer your question.. First, if your "Gross" (before taxes and deductions) income is $85K, then you make $7083 per month. When it comes to income, we need to know several things.. Lending rules require you be employed for 2 or more years, and if you have bonus, tip or commission income, then you need to be receiving that "Type" of income for 2 years as well for it to be considered.. additionally, if your year over year is increasing, then they will take the average of 2 years.. but if it's decreasing, they will take the 12 month average. If you are hourly or salary (best scenario), then whatever your current hourly rate or salary is, we will use that to determine your monthly income.. Also, if you have a 2nd job, then that income will also need a 2 year history with the lower of 24 or 12 months average to be considered.. With this knowledge, are you still at $85K per year? As far as debt goes. We ignore utility payments, cell phone, car or health insurance, etc, etc,,, basically, if there is no "Loan" associated with it, we ignore it.. Now lets take the "minimum" monthly payments associated with true "Debt".. credit cards, car loans, student loans.. etc.. add up all the minimum payments.. Do you have child support or alimony? That will need to be included as well. .what about payments on past judgement's or unpaid tax liens?? Those payments will need to be added. With that, they will also add your new housing payment, including principal, interest, taxes, insurance, HOA and any other assessments. Take all those together, and does that now equal $4,600 per month? If so, then you are at a 65% Debt to income ratio.. and that is way outside of the acceptable range. every lending program is different, but in general, if you're at 45% or below, you would meet the guidelines for most loan programs.. a few select programs will go up to 56%, but no one will go above that. Realistically, your loan officer should have sat down with you and explained this to you. If you are using a big bank, then it's no surprise to me that they didn't give you an explanation.. you're not really dealing with a "Loan Officer"... but if you did apply through a mortgage banker/broker.. then they should have sat with you and explained it. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Feb 1st 2019
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RJ Hartnett (RJHartnett)
#836 ranked lender in California - 7 contributions

You should talk to someone else. It really depends on who you are working with in the end. We approve turn downs like this every day. We are here if you need help. 6572310200.

Feb 1st 2019
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Happy to help. Take all of your monthly debt credit cards personal loans auto loans student loans and house payment including taxes , insurance AMD HOA and divide it by your monthly income. Can't go over 45% but we may have additional options. I am here locally and can meet and go over with you or call me

Feb 1st 2019
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RJ Hartnett (RJHartnett)
#836 ranked lender in California - 7 contributions

You can go up to and over 50% DTI depending on the program. You are currently at 64.9 DTI. You might qualify for FHA and VA. If you pay some of the debt off through the loan then your DTI would be lower. Also, what does that $4600 monthly consist of?

Feb 1st 2019
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Bill Cook (loanpro)
#664 ranked lender in California - 48 contributions

Need more info on credit history to give a better response. Number of accounts, does 1 or more have a 24-month history?Is this a refinance or purchase? If a purchase how much is your down payment ?$4,600 debt monthly means you spend 64% of the $7,083/month you make.I'll presume your housing payment is included the $4,600 debts.your total new debts per month should be $3,500 or less for an FHA loan..you may go to as much as $3,888 in total debts including the new housing payment.

Feb 18th 2019
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