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How picky on DTI?

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tcbofade
Super Contributor

How picky on DTI?

DW is getting ready to refinance the mortgage.

 

Credit Union says that we must stay under 45% DTI.

 

Assuming that the appraisal comes in where we expect it, an 80% LTV refinance would put her at 45.8% DTI.

 

argh.

 

Currently, we're at 4.5% interest, so I'm hoping that a very slightly lower rate would resolve the DTI issue.

 

Your thoughts?

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 1 of 10
9 REPLIES 9
CH-7-Mission-Accomplished
Valued Contributor

Re: How picky on DTI?

Is the DTI just the principal, interest, taxes and insurance or do you have installment and revolving debt that enters that bottom ratio?

Message 2 of 10
Anonymous
Not applicable

Re: How picky on DTI?

Your income would help with DTI, so I'm gonna assume y'all have a reason for her goin solo.  I'd say its worth a shot.

Message 3 of 10
tcbofade
Super Contributor

Re: How picky on DTI?


@CH-7-Mission-Accomplished wrote:

Is the DTI just the principal, interest, taxes and insurance or do you have installment and revolving debt that enters that bottom ratio?


In her case, the new mortgage will pay off all of her revolving debt....she has no installment debt other than the existing mortgage.

 

Assuming we get the same rate that we have now (4.5%), her backend DTI will be 45.8.

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 4 of 10
tcbofade
Super Contributor

Re: How picky on DTI?


@Anonymous wrote:

Your income would help with DTI, so I'm gonna assume y'all have a reason for her goin solo.  I'd say its worth a shot.


Actually, it won't.  My monthly debt payments exceed my documentable income. 

 

 

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 5 of 10
coterotie
Established Contributor

Re: How picky on DTI?

Each CU is different.  If they are going to portfolio the loan, they can be somewhat flexible.  If it is going to be sold, then the DTI is pretty firm.  Can you see about shifting some debt over to you?  Or have you shopped the insurance really hard?  Change deductibles, go with limited replacement bunch of other ways to save money to qualify and then change to the coverage you really want after closing.  As an example, my mortgage company was estimating insurance on our house at 125/month.  I got it through USAA for $23/month.

 


@tcbofade wrote:

@CH-7-Mission-Accomplished wrote:

Is the DTI just the principal, interest, taxes and insurance or do you have installment and revolving debt that enters that bottom ratio?


In her case, the new mortgage will pay off all of her revolving debt....she has no installment debt other than the existing mortgage.

 

Assuming we get the same rate that we have now (4.5%), her backend DTI will be 45.8.


 

Message 6 of 10
tcbofade
Super Contributor

Re: How picky on DTI?


@coterotie wrote:

Each CU is different.  If they are going to portfolio the loan, they can be somewhat flexible.  If it is going to be sold, then the DTI is pretty firm.  Can you see about shifting some debt over to you?  Or have you shopped the insurance really hard?  Change deductibles, go with limited replacement bunch of other ways to save money to qualify and then change to the coverage you really want after closing.  As an example, my mortgage company was estimating insurance on our house at 125/month.  I got it through USAA for $23/month.

 


@tcbofade wrote:

@CH-7-Mission-Accomplished wrote:

Is the DTI just the principal, interest, taxes and insurance or do you have installment and revolving debt that enters that bottom ratio?


In her case, the new mortgage will pay off all of her revolving debt....she has no installment debt other than the existing mortgage.

 

Assuming we get the same rate that we have now (4.5%), her backend DTI will be 45.8.


 


Thank you.  They ARE a portfolio type CU....they write and keep their own loans.

 

Currently, she's at 4.5%, and I'm hoping that a rate in the 3's will also solve the DTI problem....

 

I'll let you know in EIGHT days!!  woot!

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 7 of 10
Peter1142
Established Contributor

Re: How picky on DTI?

The DTI rules frequently quoted here are for manual underwriting... automated underwriting works it's own numbers. I bet you will be ok. Good luck!
Message 8 of 10
tcbofade
Super Contributor

Re: How picky on DTI?

We're good!  She got preapproved today! WOOT!

02/01/24 Fico 8: EX 757, EQ 803, TU 783.
Fico 9: EX 760 12/16/23, EQ 790 02/04/24, TU No idea.

Zero percent financing is where the devil lives...
Message 9 of 10
StartingOver10
Moderator Emerita

Re: How picky on DTI?

Yea! Congrats! Smiley Happy

Message 10 of 10
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