Helping Military and Civilian families realize the dream of homeownership since 1990

Laura Borja- Home Loan expert- NMLS 199107

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?

The maximum debt to income ratio on a VA loan is determined by the Automated Underwriting System (AUS).  The system takes into account the overall picture of your application including  income stability, income source, amount down payment, cash reserves, credit scores, etc.

 

The general rule of thumb is that your monthly obligations should not exceed 50% of your total qualifying budget.

 

Loans with lower credit scores will require lower DTI.

Residual Income

In addition to the debt to income ratio requirements, VA also has residual income requirements. VA residual income looks at how much income is available after all monthly liabilities are accounted for.  This includes federal and state tax withholdings, utilities and child care.

 

The required amount is based on the region the property is located in and the family size.

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 150  Mission Viejo CA 920691

This website is not authorized by the New York State Department of Financial Services to accept mortgage loan applications for properties located in New York. Intended for California Consumers Only.

(619)992-4061

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Laura Borja- Home Loan expert- NMLS 199107
Laura Borja- Home Loan expert- NMLS 199107
Laura Borja- Home Loan expert- NMLS 199107