FHA Compensating factors, high DTI ratio's

Mortgage and Lending with Mortgage Miracles Happen, NMLS ID: 1289680 NMLS # 285653

The industry standard DTI (debt to income) ratios to get approved for a mortgage loan is 28 /36% of your gross income.  If you are having a manual underwrite of an FHA loan, this is the typical ratios.

The automated system (electronic approval) will give approvals higher than 50%.  We've seen at least 55% and some processors have had in the hight 50% for the backend ratio. 

How is this?

One:  Anytime you have additional compensating factors, the higher the likelihood of getting a higher than 50 DIT approval.  Without having compensating facotrs, the likelihood decreases to have ratios greater than 49.99%

Two: The bank /lender that is funding the loan has to allow for the true DU approval without additional overlays.

Most banks and credit unions have a strict set of underwriting guidelines that will not allow the backend ratio to be greater than 49.99% with their automated underwriting. 


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Lending / Financial
Mortgage Brokers Loan Placement
Responsible Mortgage Lenders
high dtis

Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Ben Gerritsen

Mortgage Loan Originator
Call Ben

Additional Information