High Debt-To-Income Ratio Solutions For Mortgage Approval
There are many high debt-to-income ratio solutions for borrowers to meet the DTI guidelines on the particular mortgage loan program they need to qualify for. The debt-to-income ratio is a determinant in mortgage qualification and the mortgage approval process.
There are many high debt-to-income ratio solutions borrowers can take to qualify for a mortgage. Mortgage lenders put a lot of weight on debt to income ratio. Lenders are concerned that high debt-to-income ratios will impact borrowers’ ability to repay their mortgages.
Debt-To-Income Ratio Guidelines on Government and Conventional Loans
Borrowers can have excellent income and perfect credit, but if they have a high debt-to-income ratio where it exceeds the maximum debt-to-income ratio requirements by
- Fannie Mae
- Freddie Mac
- FHA
- USDA
- VA guidelines
The mortgage loan application will not qualify and will not close.
High Debt To Income Ratio Is The Number One Reason For Mortgage Denial
Before a mortgage application is submitted to the underwriting department, the loan officer and processor should ensure that the borrower’s debt-to-income ratio is in line with the required parameters.
FHA and VA loans are two popular types of home loans that accept high DTIs. FHA loans may take a DTI of up to 50%. Also, you don’t need an excellent credit score to qualify for an FHA loan. VA loans are recognized as the most lenient.
Suppose the loan officer or mortgage processor is unsure about qualified income due to irregular overtime, part-time, or bonus income. In that case, they should get a verification of employment and income before they issue a pre-approval letter. Income qualification is very important and needs to be double-checked before the loan proceeds to underwriting.
What Is Debt To Income Ratio?
Typical cases where case scenarios like these become problems were when the homeowner’s insurance was quoted at one price, and before closing, the homeowner’s insurance came out to be higher. A higher-than-expected cost can be a major risk factor for mortgage loan borrowers with high debt-to-income ratios.
Gustan Cho Associates is a mortgage broker licensed in 48 states with a national reputation of being able to do mortgage loans other lenders cannot do. Over 75% of our borrowers are folks who could not qualify at other lenders due to overlays, stress, last-minute loan denial, or not having the mortgage products. At Gustan Cho Associates, we only market mortgage loans that exist and are possible at competitive rates. Besides government and conventional loans with no lender overlays, we offer hundreds of non-prime mortgage programs including non-QM and non-prime mortgages.
Homebuyers who need to qualify for a mortgage with a national mortgage company licensed in multiple states with no lender overlays can contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. We have no lender overlays on FHA, VA, USDA, and Conventional loans. Gustan Cho Associates are also correspondent lenders on non-QM loans and bank statement loans for self-employed borrowers.
