How To Calculate Debt-To-Income Ratio
Bigger Pockets
MAY 29, 2023
A sound understanding of how to calculate debt to income ratio is critical for investors. We explain the formula you need to get your DTI.
Debt-to-income ratio Related Topics 
Understanding Debt-to-Income Ratio
Bigger Pockets
NOVEMBER 9, 2023
Understanding your debt-to-income (DTI) ratio is crucial for making wise investment decisions. A high DTI ratio means you are carrying a lot of debt and are a potential risk to lenders. Your DTI impacts your ability to qualify for loans, lock in low interest rates, and take advantage of the best financial deals.
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Trending Sources
FHFA decides to scrap new debt-to-income ratio fees
Real Estate News
MAY 10, 2023
The fees, which were scheduled to go into effect on Aug. 1, were opposed by industry groups including NAR and the Mortgage Bankers Association.
Debt-to-income ratio, taxes, and insurance: How your DTI is calculated
The Mortgage Report
JANUARY 12, 2021
DTI, your 'debt-to-income ratio,' includes taxes and insurance as part of your mortgage payment. Here's how to find your DTI with taxes and insurance.
How to get a loan with a high debt-to-income ratio
The Mortgage Report
NOVEMBER 3, 2021
High debt payments make it harder to get approved for your mortgage. But you can learn how to get a loan with a high debt-to-income ratio.
What’s a good debt-to-income ratio for a mortgage? What lenders want to see
The Mortgage Report
MARCH 22, 2021
What's a good debt-to-income ratio for a mortgage? Most lenders want to see 43% or lower. But a higher DTI can be ok, too. Here's what you should know.
Buy now, pay later: How do mortgage pros deal with ‘phantom debt’?
Housing Wire
MAY 29, 2024
For his client, who had many BNPL loans on her bank statement, paying them off made a significant difference since her debt-to-income ratio was too high. But these sources also told HousingWire that they don’t see an imminent “systemic risk” tied to BNPL debt. “I It’s a little like preventive medicine,” Racamato said.
The impact of student loans on buying a home
Housing Wire
MAY 24, 2024
Student loan debt may affect your home-buying goals in a few key ways. Debt-to-income ratio (DTI) Lenders calculate your DTI ratio by dividing your total monthly debt payments (including student loans) by your gross monthly income to assess your ability to handle additional debt, like a mortgage.
LoanSnap loses mortgage lender license in Connecticut
Housing Wire
OCTOBER 10, 2024
In November 2023, Wells Fargo sued LoanSnap for $431,511 in a district court in Minnesota, alleging breach of contract in selling a mortgage that did not meet contractual requirements, such as excessive and unsupported debt-to-income ratios. The total judgment in these cases is more than $1.1 million.
Should You Focus on Saving for a Down Payment or Lowering Your Debt-to-Income Ratio?
RIS Media
JANUARY 29, 2021
When you apply for a mortgage, the lender will look at your income and debt, as well as the amount of money you can put down. Lenders also have guidelines related to debt-to-income ratio, as well as the percentage of gross monthly income that goes toward making minimum credit card and loan payments.
Debt-to-income ratio for mortgage explained
The Mortgage Report
JANUARY 13, 2022
Learn how to calculate your Debt-to-Income (DTI). See which mortgage programs and mortgage rates may be available to you.
Divvy launches new product aimed at homeownership readiness
Housing Wire
MARCH 13, 2024
They wanted to understand their credit, they wanted to understand their debt-to-income ratio, they wanted to understand how to build their savings, and they wanted education.” With these customer needs in mind, Hefets and her team set out to create DivvyUp. It is very aligned with our mission,” Hefets said. “It
Deephaven Mortgage goes all in with expansion of home equity offerings
Housing Wire
NOVEMBER 1, 2024
On average, its borrowers’ FICO scores are 740 and debt-to-income ratios are 30%. Some lenders extend 90% LTV caps on similar products, but Davis calls this a “marketing play,” adding that Deephaven’s typical production falls between the high-60% and low-70% LTV range.
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Unison unveils ‘hybrid’ home equity sharing loan
Housing Wire
SEPTEMBER 17, 2024
Eligible borrowers must have a FICO score of 680 or higher and a debt-to-income ratio of 40% or less. The maximum combined loan-to-value ratio on the property cannot exceed 70%. The product includes a 10-year, interest-only repayment term.
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Lenders: Looking to simplify closings? Work with an insurance agency
Housing Wire
MARCH 22, 2023
An affordable home insurance policy not only means lower monthly payments, but also improved debt-to-income ratio and more money to put towards home improvements, property taxes or closing costs. We’ve seen savings of up to 30% in difficult markets like Texas and Florida. You can also request a policy and easily print EOI.
California leads all states for highest bankruptcy risk to seniors
Housing Wire
MAY 16, 2024
It determined each state’s risk of bankruptcy by assigning a risk score on a scale of 100 based on factors like poverty rates, debt-to-income ratios, health care expenses and overall cost of living. The study analyzed 11 factors to determine which states put elderly U.S. citizens at the greatest risk of bankruptcy.
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Mortgage costs, lender denials jumped in 2022: CFPB
Housing Wire
SEPTEMBER 27, 2023
Higher costs and rates meant customers taking out mortgages in 2022 devoted a higher share of their income towards paying home loans. The average debt-to-income ratio for Hispanic White and Black borrowers reached over 40% in 2022, about 39% among Asian applicants and 37% for non-Hispanic whites. in 2022, up from 8.3%
Consumer advocate says policy changes are needed to help FHA buyers compete
Housing Wire
SEPTEMBER 5, 2024
Because FHA accepts lower credit scores , higher debt-to-income ratios and lower down payments than most conventional mortgages, first-time buyers have relied on them due to the ongoing affordability challenges in today’s housing market from elevated prices and mortgage rates. of the U.S. mortgage market in 2023, up from 14.3%
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3 unique mortgage products to get today’s homebuyer qualified
Housing Wire
FEBRUARY 28, 2024
Tom Davis, chief sales officer, Deephaven Mortgage Today’s market means that more borrowers have higher debt-to-income ratios, limited access to credit and are looking for alternative ways to get qualified for a mortgage.
Ballard Spahr’s Andreano: CFPB is open to “other approaches” to QM
Housing Wire
SEPTEMBER 10, 2020
Also, there is the criticism of the general QM that was put into the reg that had the strict 43% debt-to-income ratio benchmark. Now, the bureau did, in its proposal, ask for comments on whether it should specify a specific debt-to-income ratio or not. There are two proposals that came out in June.
Mortgage industry provides commentary on CFPB’s proposed changes to QM loan definition
Housing Wire
SEPTEMBER 9, 2020
In June, the bureau released two proposals regarding the QM Patch, which allows loans sold to Fannie Mae or Freddie Mac to exceed the 43% debt-to-income ratio the Bureau had established in its Ability to Repay/Qualified Mortgage rule. c) does not prescribe a specific monthly debt-to-income ratio with which creditors must comply.
5 tips for finding the right mortgage lender for you
Housing Wire
JANUARY 20, 2021
To find a qualified lender, you need a good credit score and a good debt-to-income ratio, which is the percentage of a consumer’s monthly gross income that goes to paying down debt. Before you start searching for a lender, check your credit score and debt-to-income ratio.
Highly leveraged loans on the GSEs’ books are a real fiscal danger, Calabria argues
Housing Wire
SEPTEMBER 17, 2024
. “There’s been an explosion in high-DTI lending since I left FHFA,” he said, pointing to the fact that some Federal Housing Administration (FHA) borrowers have a 57% debt-to-income ratio. DTIs on Fannie- and Freddie-backed loans have also risen, he said. “What we saw during COVID was the No.
Flyhomes acquires Home Sale Assured
Housing Wire
SEPTEMBER 11, 2023
Through the Guaranteed Backup Contract, the homeowner receives a valid purchase offer, allowing the homeowner’s lender is able to remove the departing debt obligations from the consumer’s debt to income ratio, allowing the lender to approve the loan on the new home, prior to the closing of the sale of the current home.
Fannie Mae hauls in $4.7B net income for Q2 2022
Housing Wire
JULY 29, 2022
Purchase loans have higher loan-to-value ratios, pushing the GSE’s share of mortgages with loan-to-value ratios over 80% from 22% this time last year to 34% in the second quarter of 2022. That mix of refinances and purchase acquisitions also impacted the debt -to-income ratio of loans Fannie Mae bought, and the underlying credit score.
Should I pay off student loans before buying my first home?
Housing Wire
MARCH 25, 2021
Your Debt-To-Income Ratio Is High. How much of that money do you use to pay off debt? If a majority of your monthly income goes to debt, your debt-to-income ratio (DTI) is too high and most lenders will only approve those with low DTI’s (around 43%).
Think these credit problems are stopping you from buying a house? Think again
Housing Wire
OCTOBER 27, 2020
It’s how much debt you have and how you manage it that matters to lenders. To see if your student loans will be a problem, it’s important to consider your debt-to-income ratio—or how much of your monthly income your loans and other debts take up.
HousingWire Annual: FHFA’s Sandra Thompson addresses loan buyback issue
Housing Wire
OCTOBER 11, 2023
“For example, if we’re talking about income, you may have more information that can help support a DTI [debt-to-income ratio] (…) There may be supplemental information that comes to the enterprise after the fact that probably should have met with the loan file.
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First-time homebuyers made up a record share of agency purchase loans in 2023
Housing Wire
MARCH 3, 2024
The market in which these folks purchased their first home was one of record house prices, ballooning down payments , rising rates and elevated debt-to-income ratios (DTIs).
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Freedom Mortgage founder addresses ’extraordinary’ credit profiles, profitability and products
Housing Wire
APRIL 24, 2024
To prove his point, Middleman said that he is seeing average loan-to-value ratios of 50%, average debt-to-income ratios in the lower 40% range, and credit scores in the low 700s, which is an ”extraordinary” credit profile, he said. while adding that ”we’re getting towards the tail.”
NewRez now offers Freddie Mac’s revamped downpayment assistance program
Housing Wire
MAY 8, 2023
Louis, Missouri-Illinois Program borrowers also need to meet the lender’s eligibility requirements, which typically include a minimum credit score of 620 and a maximum debt-to-income ratio of 50%. For those who make between 50.01% and 80% of AMI, there is up to $1,250 worth of assistance available.
How will first-time buyers fare if sellers can’t offer buyer agent compensation?
Housing Wire
NOVEMBER 4, 2024
If the home does not appraise, the financing would be a separate personal loan, raising the borrower’s debt-to-income ratio, potentially disqualifying them from the mortgage or making the cost to borrow go up. Rolling the fees into the mortgage” leaves the buyer with a higher interest rate.
No undue risk! Freddie Mac’s Sonu Mittal on new buyback remedy, appraisal waiver extensions
Housing Wire
OCTOBER 30, 2024
What this enhancement does is specific to three areas: debt-to-income ratio, reserves and loan amount. Through the new tool, loan officers have access to tailored information about purchase requirements, which is expected to reduce the number of resubmissions, save time and improve the acceptance rate of qualified borrowers.
Tired of renting? 6 signs you’re ready to buy your first home
Housing Wire
APRIL 7, 2021
Because of this, today’s lenders are more than willing to work with potential first-time homebuyers who have debt, just as long as their debt-to-income ratio (DTI) isn’t too high. If your DTI is in good standing and you’re consciously working to manage and pay down your debt, you might be ready to buy a house!
The mortgage industry is nervous about LLPA fee changes
Housing Wire
JANUARY 20, 2023
Debt-to-income ratio is also now a consideration on the pricing matrix, with a new pricing adjustment for borrowers with a DTI ratio above 40%. The changes are effective starting May 1, 2023.
Opinion: A rebuttal to Steve Broebeck and the CFA’s anticompetitive price fixing position
Housing Wire
AUGUST 22, 2024
Adding an additional debt burden to lower-income consumers would leave them in a worse position under the present system, increasing their debt-to-income ratio, making it harder to qualify for a mortgage , and making borrowing more expensive.
CFPB proposes a new category of qualified mortgages: Seasoned QM
Housing Wire
AUGUST 18, 2020
In addition, to be eligible to become a Seasoned QM, creditors must have considered and verified the consumer’s debt-to-income ratio (DTI) or residual income at origination. During the seasoning period, creditors would have to hold these loans on portfolio.
Regulator rescinds new Fannie, Freddie fee for riskier borrowers
Inman
MAY 10, 2023
Lending industry groups like the Mortgage Bankers Association called a fee based on borrower's debt-to-income ratio "unworkable."
Housing market hinges on mortgage rates and supply, not commission structures
Housing Wire
AUGUST 8, 2024
That gets rolled into their debt-to-income ratio, which means they look like a riskier buyer, which means their mortgage loan gets priced higher, which means they have an additional disadvantage because the cost of lending goes up for them.
loanDepot accuses ex-COO Tammy Richards of stealing customers’ information
Housing Wire
NOVEMBER 2, 2023
loanDepot claims that Richards stole confidential information, including individual loan numbers, FICO scores and debt-to-income ratios. If true, that would violate federal laws, including the Dodd-Frank Act , which requires minimum standards for all mortgage products.
Positive signs abound for 2024 housing market: ICE
Housing Wire
FEBRUARY 5, 2024
of the median household income, the average payment is down from a 38-year high of more than 38% in October. But that number is still 9 percentage points above the 30-year average debt-to-income ratio of 24.2% and slightly less than the 33.8% peak prior to the housing market downturn in 2006. “If
FinLocker releases updated web experience for consumers
Housing Wire
APRIL 27, 2022
“In the context of higher interest rates, one could argue that with higher rates, there’s correlated higher mortgage payments, which make it more difficult for people to qualify because of debt-to-income ratios,” Brian Vieaux, FinLocker’s president, told HousingWire.
Builders rediscover a tool from the 1980s that keeps new home prices from falling
Housing Wire
DECEMBER 12, 2023
In this case, the total debt-to-income ratio (DTI) would be 51% and would exceed the Fannie Mae or Freddie Mac DTI limit of 50%. The math is straightforward: Imagine a builder selling a $400,000 home to a buyer making $100,000 a year. To reduce the DTI to 48%, the builder would need to cut the sale price by 10%.
A look at the mortgage hot topics for 2024
Housing Wire
NOVEMBER 7, 2023
Media stories about home affordability rarely cover how the GSEs allow for low down payments and higher debt-to-income ratios. And when lenders — not headlines — explain cash-to-close and monthly all-in costs relative to incomes, the lights go on for borrowers.
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