Jumbo Loan DTI Max

chfenton · ‎02-07-2020

Following up on a post from a couple of months ago--we are likely going to not be able to sell current house prior to moving out of state. Trying to figure out max purchase price in new state--Assuming we purchase a $750K house with 20% down --the $600K resulting mortgage with taxes, insurance and HOA with all other debt (including current home mortgage) will put us right about at 35-36% DTI. Is there a generally accepted max for jumbo --knowing that by definition it is not a conventional mortgage so curious as to any guidelines or does it vary significantly lender to lender?

Thanks.

homeloanexpert · ‎02-08-2020

43% would be the preferred DTI. Exceptions can be made to allow higher ratios depending on loan program, LTV and overall credit.

Branch Manager - Specializing in FHA, VA, USDA, Conventional, Jumbo, Portfolio and Non-QM Loan Products.

Citylights18 · ‎02-11-2020

Conventional loan is any product that doesn't have the government as a guarantor.

DTI has a front and back end ratio. Usually the front end is like 29% with the back end 41%. That backend 12% is to cover car payments, credit cards, student loan payments ect. If your back end is greater that 12% it eats into what they will qualify you on the front end.

Another strategy to help you on the ratio is to put 10%, 15%, 20% on the mortgage dropping down that front end ratio even if it requires adding to the back end IF you have room for it. There are lenders out there that will permit a back end of 55%.