What is the highest DTI (debt To Income) ratio can go?

Asked by Mantecabros, Corona, CA Thu Feb 18, 2010

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Bentley Advi…, , San Mateo, CA
Thu Feb 18, 2010
All depends on your loan scenario. Jumbos can be done to 45%. Fannie now caps at 50%. Some obscure lenders advertise 55%. 45% is a good rule of thumb since Fannie's 50% requires some solid compensating factors such as strong assets and/or stellar credit and/or low LTV, etc.
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, ,
Thu Dec 22, 2016
I have gotten up to 56% but it depends on credit profile, fico scores and the loan program.

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hyderlaw, Agent, Brookline, MA
Thu Dec 15, 2016
What you really should be asking yourself is whether the higher percentage can sustain that type of risk. Ethically, anything over 45 percent is stretching the budget. There are situations where a car loan is to be paid off and it will substantially lower the ratios and situations where things will improve in the foreseeable future. Remember, this is how we got in this mess a decade ago. Don't encourage over 45 percent, and that is high as far as I am concerned.
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, ,
Fri Feb 19, 2010
It will depend on your specific lender's guidelines and risk tolerance. For us if you go FHA, so long has you have the necessary credit score and history, income, and reserves (3 months worth or mortgage payments), you can get approved up to 55%. Conventionally/Fannie Mae, up to 50%. You will find that most your large depository based banks (i.e BOA) will have lower DTIs, where as your brokers, corresponding lenders, and priavtely direct lender (like my mortgage co.) have more flexibility in that regards.
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Jeff Chin, , 02459
Thu Feb 18, 2010
I've recently gotten an approval for 55% for FHA through DU. The borrower had great credit and substantial reserves. Like some of these other posters, your scenario will be run through the "algorithm". Be sure to as your lender if they accept DU findings, some prefer to set their own thresholds.

Good Luck!
0 votes
Connie Bramb…, Agent, Rancho Cucamonga, CA
Thu Feb 18, 2010
Hi There,
Generally speaking, 50% is aobut the highest on FHA. But it also depends on your income and the lender.
50% of what? If your income is very minimal you may not be allowed to go as high as someone who has a significant amount left over after the 50%. For instance someone who earns $2000 a month may not be able to survive on $1000 a month. However if a person earns $8000 a month and has $4000 left over, well that is a significant difference. Every situation is unique. Every buyer has different needs. Talk to a few different lenders and ask your Realtor who they might recommend to you as well.
Best of luck to You,
Connie Bramble
0 votes
Nicholas, , San Francisco, CA
Thu Feb 18, 2010
I have found that for conforming loans on my system, your backend ratio can now only go up to 50%. However, if it is over 45%, 6 months of reserves are needed to get an accept. Nonconforming is at 45%. If you have less than 20% down, it is 41%. Note that for the mha (obama) refinances, dti's aren't even calculated as long as your payment is decreasing, or increasing by less than 20%.
0 votes
, ,
Thu Feb 18, 2010
Hi Mantecabros,

With FHA, most lenders will accept whatever is approved through an automated underwriting system like Fannie Mae's DU or Freddie Mac's Loan Prospector.

I've seen 56% approved through Fannie Mae's DU for FHA.

0 votes
, ,
Thu Feb 18, 2010
This will depend on the type of loan and if you will need PMI. You may find a lender here and there who will go to 55% on a very strong file, but many cap it at 45% now, and if you want a conventional loan with PMI, it is 40.
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