topic Re: Does DTI ratio include the loan itself (that your are applying for)? in Mortgage Loans

Does DTI ratio include the loan itself (that your are applying for)?

briancastro — Tue, 12 Sep 2023 19:25:12 GMT

Simple question I can't find answer to. I want to see if I'm likely to qualify for HELOC before applying and having hard inquiries...

The recommended DTI is <43%.

Does this include the presumed debt from the loan itself that you ar applying for? or is it the current total not included the HELOC you are applyign for. Makes a big difference.

Re: Does DTI ratio include the loan itself (that your are applying for)?

ShanetheMortgageMan — Tue, 12 Sep 2023 19:28:45 GMT

Yes, the DTI will always include the new mortgage/HELOC/home equity loan you are applying for.

When applying for a HELOC, and if the amount you applied for pushes your DTI over the maximum for the program, then you'll probably get a counter offer to a lower HELOC limit. Good idea to ask about that upfront, because not all lenders will counter instead will just send a denial.

Re: Does DTI ratio include the loan itself (that your are applying for)?

briancastro — Tue, 12 Sep 2023 19:41:05 GMT

Thanks you very much! This is absolutely not clear from the research I've done...most sites just say to add up your debts/monthly payments.. blah blah. Most probably wouldn't think to inlcude the proposed loan as you woudldn't even know the details unless you did all your own calculations. I 'have' confirmed withthe banks that they woudl offer a counter - but this is good info for others. I hope this helps someone..