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Back-end DTI Ratio
#1
Is the acceptable back-end DTI ratio of each lender different from one another?
 
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#2
Great question. Absolutely YES. Back end debt to income ratios allowed per HUD guidelines for FHA loans is 56.9%. Many mortgage lenders have mortgage lender overlays on back end debt to income ratios. Most banks and credit unions will cap the back end debt to income ratios at 40% to 45%. Some mortgage lenders will cap the back end debt to income ratios at 45% for borrowers with credit scores under 680 FICO and 56.9% for borrowers with credit scores over 680 FICO. FHA allows maximum back end debt to income ratios of 56.9% for borrowers with credit scores over 620 FICO. If your credit scores are under 620 FICO, then your back end debt to income ratios goes down to 43% allowed per HUD GUIDELINES.

Kay,

Attached is a link to a blog post I published several weeks ago about solutions to high debt to income ratios.

http://gustancho.com/high-debt-to-income-ratios/

 
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