Debt to Income Ratios

High Debt to Income Ratio Mortgage Loans

Solutions to high debt to income ratio mortgage loans

Many mortgage loan borrowers think they will not qualify for a mortgage loan because they have high debt to income ratio.  They are correct in a sense that the majority of mortgage lenders like to see the mortgage loan borrower debt to income ratio no more than 40%.  I specialize in helping mortgage loan borrowers with high debt to income ratio and deal with various mortgage lenders that will go as high as a 56.9% debt to income ratios in mortgage qualification for FHA insured mortgage loans.

Lenders specializing in high debt to income ratio mortgage loans

If you have high debt to income ratio, I suggest that you consult a mortgage broker who specializes in high debt to income ratio mortgage loans.  Every mortgage lender has different debt to income ratio qualifying criterias as well as credit score criterias.  Just because one mortgage lender has a maximum debt to income ratio requirement of 40%, it doesn’t mean that all mortgage lenders do.  Like I mentioned earlier, I have wholesale mortgage sources that can qualify a mortgage loan borrower with a debt to income ratio as high as 56.9% for FHA insured mortgage loans.

Conventional loans and debt to income ratios

Conventional loans have tougher debt to income ratio mortgage lending guidelines.  Typically, most conventional mortgage loan lenders do not want to see a debt to income ratio of higher than 40%.  I can help a mortgage loan borrower with a high debt to income ratio, as high as 50%, secure a conventional mortgage loan.  Credit scores need to be strong and other mortgage lending guidelines apply.

Solutions to high debt to income ratio mortgage loans

Other ways of solving a high debt to income ratio problem is paying off existing debt and creditors.  Paying off your open credit card balances to eliminate the monthly payments would be a great start.  Most times a car payment can be $300 dollars or more per month.  Paying off your car loan can give you a lot of mortgage buying power.

Non-occupant co-borrowers

If you have high debt to income ratio and are thinking of a FHA insured mortgage loan, you might consider asking a family member to co-sign for you as a non occupying coborrower and use their income to solve your high debt to income ratio problem.  The Federal Housing Administration is the only mortgage loan program that allows a non owner occupied coborrower.

Overtime income, part time income, and other income

Unfortunately, mortgage lenders have income requirements when it comes to overtime income and part time income to use it as additional income sources to offset high debt to income ratio.  Overtime income, part time income, commission income, and bonuses can be used as additional income streams in offsetting high debt to income ratio but they normally require a 2 year history.  If it is close to 2 years, a letter will be required by your company human resources department stating that you will be guaranteed so many hours for the next six to twelve months.  Rental income can be used if you have declared it on your income tax returns.  Depreciation can be used as income if you have declared it on your income tax returns as well.

If you have high debt to income ratio and are looking for a mortgage loan, please contact me at 262-716-8151 or email me at gcho@gustancho.com or you can visit us at www.gustancho.com .

Gustan Cho NMLS ID 873293

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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