Helping Military and Civilian families realize the dream of homeownership since 1990
A debt to income ratio (DTI) is the percentage of your qualifying income that is allocated to debt.
What is included in the DTI?
- The estimated total housing payment for the new mortgage loan
- All debts reflected on the credit report
- Estimated payments for any deferred student loans with zero payment on the credit report
- Alimony and child support
- Payments on State and Federal income tax payment agreements
- Any other debts that you are obligated to pay
- In community property states, the debts of the non-purchasing spouse will be included in the DTI calculation.
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.
What is the max DTI?
USDA has strict DTI guidelines which dictate ratios for both housing as well as the total debt ratio.
The target housing ratio is 29%
The target total debt to income ratio is 41%
Buyers with credit scores over 680 who also have compensating factors are allowed higher ratios
32% for housing
44% for total DTI.
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.
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Laura Borja | Senior Mortgage Consultant | NMLS#199107
Cell: (619) 992-4061
laura@lauraborja.com
27271 Las Ramblas ste 350 Mission Viejo CA 920691
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Ocean Lending Home Loans Inc. NMLS ID #1626788 (www.nmlsconsumeraccess.org). 27271 Las Ramblas ste 350 Mission Viejo CA 92691 (888) 508-5030. All rights reserved. This is not an offer to enter into an agreement. Information, rates, & programs are subject to change without prior notice and may not be available in all states. All products are subject to credit & property approval. Ocean Lending is not affiliated with any government agency. Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act License# 41DBO76602 and Finance Lender Law License #60DBO71981.