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dti: Debt-to-Income Ratio (DTI) - What Counts Against You? - 01/19/12 10:18 AM
The debt-to-income ratio (DTI) is the ratio of your debts divided by your income, and is one of the main things that determines how large a mortgage you can qualify for. But do all of your debts count against you?The answer is no, not all debts count against you when determining the size of the mortgage you can get. Here is a list of some of the things that do NOT count against you when a lender calculates your DTI:
car insurance electricity water gas sewer phone - land line phone - cell Internet cablecollection accounts health insurance In basic terms, … (0 comments)
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dti: Debt-to-Income Ratios (DTI) Explained - 01/13/11 08:10 PM
What is a debt-to-income ratio?
· The debt-to-income ratio (DTI) is the ratio of liabilities to gross income.
· Used to determine whether someone can afford to pay their mortgage.
· Different loan programs have different DTI ratio requirements.
Front-end and back-end DTI
· FHA loans have 2 DTI ratios
-Front-end ratio (housing ratio) -Back-end ratio (total debt ratio)
· Conventional loans (non-government loans) and VA loans have only one DTI ratio. In the past, there were 2, but this guideline has changed.
How is the DTI calculated?
· Front-end DTI = (Principal + interest + taxes + insurance … (1 comments)
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dti: Have $50,000 in Credit Card Debt? - Can You Get a Mortgage? - 06/14/10 05:49 PM
People are always asking us if they can get a mortgage with $30,000, $40,000, $50,000 or more in credit card debt. The short answer is that it doesn't really matter how much your total debt is. The debt-to-income ratio (DTI) used to determine whether you qualify for a loan is based on the minimum monthly payments that show on your credit report, NOT on the total balance due.To calculate your DTI, take the minimum monthly payments that show on your credit report, add your monthly housing payment to that amount, and then divide the total by your monthly gross income (income … (2 comments)
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dti: What's the Max DTI? 28%, 36%, 41%, 43%, 50%...??? - 02/05/10 06:16 PM
We get a lot of questions about debt-to-income ratios these days. Here are the underwriting guidelines for the various types of loans:
Conventional (non-government) loans:
If the loan is underwritten manually (by a person), the debt-to-income ratio (DTI) is 36%. If the borrower has strong compensation factors, the DTI can be as high as 45%. Compensating factors include such things as very high credit scores, large down payment, large amount of reserves (money in the bank), etc. If the loan is underwritten by the underwriting software that is available to some lenders, the DTI ratio is 45%, and it can go … (40 comments)
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dti: How High Can the DTI Go? - 08/28/09 10:06 AM
We are often asked what the maximum allowable debt-to-income (DTI) ratio is for the various types of loans. Here you go:
For FHA loans, the maximum allowable DTI is 43% if the loan is manually underwritten and it is unlimited if the loan is underwritten through FHA's online underwriting software. We routinely get approvals with DTI's in the 50% - 60% range if the borrower has good credit. For VA loans, the maximum DTI is 41% if the loan is manually underwritten and it is unlimited if the loan is underwritten through VA's online underwriting software. Again, we routinely get approvals … (2 comments)
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dti: Why Does a Lender Want My Mortgage Statement? - 11/18/08 09:27 AM
Here's another question we were asked at a class we taught recently:
Q: If someone owns a house and is buying another one, why does a lender sometimes want to see the mortgage statement for the buyer's current property? I thought the mortgage payments would be listed on the credit report.
A: The underwriter is looking to see if the homeowner's insurance and property taxes are included in the monthly payment. There is no way to tell from a credit report if the taxes and insurance are included in the amount reported to the credit agencies. If they are not, then they have … (4 comments)
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Chris Thomas
Denver,
CO
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The Mortgage Experts at America's Mortgage
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