Installment debt with less than 10 months remaining could be excluded from the DTI calculation.
Paying off installment and revolving debt to qualify IS allowed.
That is a tougher question to answer as the amount varies widely. The percentage can be anywhere between 40% to 50% based on the loan program, the occupancy, the loan to value and the credit score..
Also, though each program might set a max DTI, that doesn't mean that you will be approved with that maximum ratio.
For example, let's say the program has a max 50% total DTI, however, you are doing the minimum amount down, have a credit score that just makes the cut ,have just enough money to cover the cash to close and your new mortgage payment is double what you were paying in rent before. It is entirely possible that the automated underwriting system will determine that your risk level is too high to allow you to go to the max DTI. In that case, your loan would need to be restructured with more down payment or less debt to lower the DTI and allow for an approval.
Your loan officer will be able to guide you on what needs to be done to meet the qualifying guidelines.
This overview is not all inclusive and does not include all guidelines or potential qualifying situations. Contact us or your lender for additional information that applies to your situation.
Laura Borja | Senior Loan Officer | NMLS#199107
Cell: (619) 992-4061 | Branch Main: (858) 264-1547
1615 Murray Canyon Rd ste 1020 San Diego CA 92108
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