Maximum DTI Question

[Rindy]

Hi All,

I am hoping to FINALLY pull the trigger soon on a home purchase BUT I have a question about DTI. Can someone tell me what is the "typical" maximum DTI on a conventional loan? I am assuming FHA ia about 45%  but I wasnt so sure regarding conventional.

Thanks,

[Revelate]

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@Rindy wrote:

Hi All,

I am hoping to FINALLY pull the trigger soon on a home purchase BUT I have a question about DTI. Can someone tell me what is the "typical" maximum DTI on a conventional loan? I am assuming FHA ia about 45%  but I wasnt so sure regarding conventional.

Thanks,

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Typical maximum is around 43% range; some lenders may be at 36% depending on their requirements.

[StartingOver10]

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@Rindy wrote:

Hi All,

I am hoping to FINALLY pull the trigger soon on a home purchase BUT I have a question about DTI. Can someone tell me what is the "typical" maximum DTI on a conventional loan? I am assuming FHA ia about 45%  but I wasnt so sure regarding conventional.

Thanks,

---

And for FHA the max back end ratio is substantially higher than 45%.  It is 56.99% but I have seen lender overlays where the max is 50%.

Max conforming conventional is 45% but you get a better idea with this matrix:  https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf

I have to see if I can find somthing on non-conforming loans (there is another term for it but it escapes me at the moment)

Edit: Found the term:  it is Non Qualified Mortgages.   It doesn't mean that the buyer is Non-Qualified, but that the loan doesn't meet the QM criteria. There is a huge market in these types of loans too so don't be afraid to apply to a good lender (not a big box bank).  

[Anonymous]

Conventional: very safe at 28/36, probably safe at 31/43, really pushing it at anything above 45% backend.

FHA: very safe at 31/43, probably safe at 33/46, really pushing it at anything above 48% backend.

Depending on lender overlays of course.

[Revelate]

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@Anonymous wrote:

Conventional: very safe at 28/36, probably safe at 31/43, really pushing it at anything above 45% backend.

FHA: very safe at 31/43, probably safe at 33/46, really pushing it at anything above 48% backend.

Depending on lender overlays of course.

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Do lenders look much at front-end anymore?  None of the ones I talked to in my own mortgage adventure seemed to care, was all about the backend.

[Anonymous]

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@Revelate wrote:

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@Anonymous wrote:

Conventional: very safe at 28/36, probably safe at 31/43, really pushing it at anything above 45% backend.

FHA: very safe at 31/43, probably safe at 33/46, really pushing it at anything above 48% backend.

Depending on lender overlays of course.

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Do lenders look much at front-end anymore?  None of the ones I talked to in my own mortgage adventure seemed to care, was all about the backend.

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Really only if you have no other debt. There's no guarantee a 43/43 would fly for FHA.

[pizza1]

this is great info to know. Hoping to buy in 2 yrs.

[DallasLoanGuy]

45 i pretty safe

see a lot of deals go thru around 50%

[Anonymous]

I work at a brokerage and we just had one of our lenders move up to 52

[Anonymous]

Highest I've ever pushed FHA was 54.something, but it required compensating factors. I don't like going that high though unless I know their income is trending upwards.