Forgotten Your Password?

Need to Register?

Question Icon

What is an Acceptable Debt-to-Income Ratio?

My debt-to-income ratio is 70%. Would I still qualify for a loan? What is the cut off for debt-to-income ratios to be approved to get a mortgage? by maryglo13951 from Denver, Colorado. Jan 25th 2017 Reply


Matthew Rundle (MatthewRundle)
#503 ranked lender in California - 8 contributions

The acceptable debt to income ratio varies for loan type. Conventional is typically 45% but can go up to 50%. FHA has ratios that are 47% of your house payment (Housing Ratio) versus your income and 57% of your total debt (Total Debt Ratio) while VA does not set a maximum ratio as the loan has to be approved via automated underwriting. The 70% you have is too high with the exception of VA possibly. Use the above ratios as a gauge and Best of Luck.

Jan 25th 2017
1
0
Mark Hemingway (SFSLend)
#1 ranked lender in Colorado - 598 contributions

Give me a call when you can and let's go over what your income and debt look like. I can be contacted at 303-955-5606. I have some alternative products that can calculate income in different ways. The rates are not too bad so depending on your situation we should be able to find something.

Jan 26th 2017
1
0
Mark Hemingway (SFSLend)
#1 ranked lender in Colorado - 598 contributions

Also I am a local mortgage broker located in Castle Rock so we should be able to communicate easily with each other. Also you can visit my website for some of the products I spoke about but definitely give me a call so we can discuss and brain storm what is available for you.

Jan 26th 2017
1
0
Robert Pinzhoffer (PeakHomeLoans)
#317 ranked lender in Florida - 9 contributions

Hello Mary,There are two debt-to-income (DTI) ratios, monthly debt x 100% / monthly income. Number one is front-end which doesn't include housing expenses and the other is back-end that does. You would know your front-end DTI as this would include car payments, minimum credit card payments, other charge cards, student loans, etc. If this ratio is already 70% you need to pay down many of your debts until you are in the 28% DTI range. However, I think you may be miscalculating the 70% figure because there are so many exceptions and items not counted, i.e. monthly payments with less than 10 months left, deferred student loans, etc.Assuming you're living in an apartment, you would not know your back-end DTI yet. This would depend upon and include the monthly mortgage payments (PITI - principal, interest, insurance, taxes) you would be making on the home you picked out. We routinely get applicants approved with back-end DTI's at or under 60%.Thanks for the question,Robert Pinzhoffer,President,Peak Home Loans,St. Petersburg, Florida

Jan 26th 2017
1
0
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,571 contributions

That is an extremely high debt ratio, and would never be approved anywhere. Standard conventional is 45%, and FHA can creep up to 51%, 52%, 53% if everything else looks great. VA loans don't have an official ratio number, but I never see anything above 50% be approved, ever. Lenders also look at your housing only ratio, which is what percentage of your income is spend solely on the home.

Jan 26th 2017
1
0
William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,055 contributions

In my experience, most borrowers calculate their DTI incorrectly.. You should let a professional calculate it for you.. First, DTI is calculated using your "Gross" income (before taxes or deductions) not your take-home pay.. When calculating your DTI, only "Minimum" monthly payments on "Debt" is considered along with the new housing payment.. credit card payments, student loan's, car payment, child support, alimony, tax payments and the new housing payment including taxes, insurance, mortgage insurance, and any association fees, are all included in your DTI.. Things that are NOT added are cell phone bill, utility payments, health or auto insurance, gas, food, cable bills', etc.. these items are not added.. FHA allows for the highest DTI to 57%.. Conventional will go up to 45%, with a few exceptions up to 50%.. I'm a preferred Lender with Arizona and California 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 / RPM Mortgage NMLS 1541014 / AZMB0121893

Jan 26th 2017
1
0
Bill Cook (loanpro)
#633 ranked lender in California - 43 contributions

43 with most conventional loans, higher for FHA up to 56.99% If your tax returns are the reason, there may be some expenses that can be added back in, IF you are self-employed

Mar 22nd 2017
0
0
Subscribe to our news feed.