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What is the highest DTI that acceptable to get a loan?

by kj-df76324 from Newton Hamilton, Pennsylvania. Dec 26th 2017 Reply


Corey Gee (cgee@perennialfunding.com)
#95 ranked lender in Pennsylvania - 18 contributions

Thank you for your question. There are various factors here. What type of loan are you doing? Are you a US Military Veteran? We can often times go as high as 60% DTI with compensating factors. Are you buying or refinancing? Please let me know if you'd like to discuss, there are generally ways to resolve DTI issues. My direct line is 610-233-0098 or you can email me at cgee@perennialfunding.com

Dec 26th 2017
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,414 contributions

More info needed,,,, FHA can go as high as 57%, VA will go as high as 56% but VA has a different way of calculating DTI and you must have VA benefits available.. For conventional, you can go as high as 50% on some products, but in all reality.. it's not as simple as "what's the highest DTI allowed" because loan products (purchase, refi, cash out refi,), occupancy type (Primary, 2nd home, investment), etc, all have varying rules. Also, when it comes to calculating your DTI, it's best to let a professional help with it.. most borrowers calculate it incorrectly, and typically come up with a higher ratio than actual. For Mortgage lending purposes, we only include the MINIMUM payments on outstanding DEBT.. so credit card payments, car loan, student loans, etc, We also include any IRS payments, alimony or child support, and for some loan products, we are required to add a "Phantom" payment for any outstanding collections that you might have.. and we have to add the new housing payment as well. These are all included in your ratio.. but we do not include cell phone, utilities, insurance, etc.. So we include DEBT payments, but ignore monthly reoccurring BILL'S.. Understand that "Debt to Income" ratio's take into account both Debt and Income.. so the info above is just in regards to your debt.. . When it comes to calculating qualifying income, the formulas are much more complicated.. Commissions, Salary, hourly, tips, piece work, variable pay, or self employed.. all of these have varying guidelines.. This all being said, to calculate a payment, we need to know all 3 credit scores for all borrowers, since interest rates are based on the lowest mid score of all borrowers.. Also, property type.. SFH, condo, town house, MFH,,, All have different rates.. then occupancy.. Owner occupied, 2nd home or investment.. again.. all 3 have different rates.. what about down payment? 3%, 3.5%, 5%, 20% more?? rates vary based on the down payment... Realistically, you should ditch the internet blog posts and pick up the phone and contact a mortgage banker/broker and apply with them. (Stay away from the "Big 4" Banks)..Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with a Banker/Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the banker/broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the big box banks. 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 / RPM Mortgage NMLS 1541014 / AZMB0121893

Dec 26th 2017
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Pamela Fludgate (pam@mymortgagestore.net)
#333 ranked lender in Florida - 1 contribution

Hello! When we are analyzing DTI on a loan, we are looking at the loan app in it's entirety. Some people may be able to have a higher DTI than others. Each loan product also has their own thresholds. FHA has the most aggressive DTI. There are other items that also need to be considered for DTI. Sometimes we can eliminate certain payments from DTI. I understand the information seems vague, that is because it is. It is loan app driven. You can e-mail me at pam@mymortgagestore.net if you would like to discuss further. Thanks for inquiring.Pam

Dec 26th 2017
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Thomas Dasta (lendfm)
#32 ranked lender in Georgia - 50 contributions

You can go as high as 55% for FHA and 50% conventional.

Jan 8th 2018
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