High DTI applying for a loan
I am moving out of my parent’s house and I plan on buying my first home. I live in Maricopa County in Phoenix and I make $50k a year with a credit score of 714. I have a good credit report and I want to apply for a loan. The problem is my high debt to income ratio which is around 46% on a $900 mortgage. What are my options? by jsnover383 from Baltimore, Maryland. Nov 18th 2021
Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,848 contributions
The basic math is that someone with no debt can buy a home about 4.5% their yearly income. As your debt goes up, your maximum house price goes down. Most lenders will allow up to a 50% debt ratio, and most FHA lenders will allow up to 55%. Your best move is to get rid of the debt, and to NOT buy a home with a high debt ratio. You may succeed, but statistically you won't. Good luck. I lend for properties in MN, WI, IA, ND, and SD. Find me at JoeMetzler.com - Cambria Mortgage, NMLS 274132
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