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48 Meriden Rd, Suite 1, Middlefield, CT 06455
844.788.7237
info@northeast-mortgage.com

Understanding How Debt-To-Income (DTI) Works When Applying For A Mortgage

Connecticut

What is DTI?

When applying for a Mortgage, your DTI plays a huge factor in qualifying for a mortgage. Debt-to-income (DTI) is a ratio which Loan Officers, like myself, look at to determine whether or not you are able to qualify for a mortgage. DTI is based on your monthly Debt and monthly Income.

 

There are 2 types of DTI:

 

– Front End DTI is your monthly housing expense
– Back End DTI is all your monthly debt (housing, credit card, loans, etc)

 

Each mortgage program (FHA, USDA, VA, Conventional) have different requirements when it comes to Debt-to-Income.

 

FHA for example is for those who have less-than-perfect credit and/or are first time home buyers. So compared to a Conventional Mortgage which has a lower Debt-to-Income tolerance, FHA is more lenient and allows borrowers to have a much higher Debt-to-Income (meaning more debt). This is due to the difference in the purpose of the two products. Same goes for USDA and VA loans – they both have different goals for their loan programs and thus have different Debt-to-Income requirements.

 

For a free mortgage consultation and to understand how Debt-to-Income works – please contact me any time via email, text, or phone call! Thank you and I look forward to speaking with you!

 

Ram
Ramazan Sinani
Mortgage Loan Originator
Northeast Financial
NMLS: 1590862 Company NMLS: 117273
Cell: 203-695-6858 Fax: 203-413-6240
ramazan@northeast-mortgage.com

 

 

 

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General Disclosure

When discussing programs that allow for 3.5% down, 0% down, or a percentage down – the borrower is not required to only put that exact percentage down. FHA, USDA, VA, CHFA, Jumbo, and Conventional Mortgages allow borrowers to put down more of a percentage if they desire to. The percentages mentioned in the information provided is the minimum down payment that these programs require. Each one of these programs have specific credit score, debt-to-income ratio, and payment history requirements to qualify for the minimum down payment.

Disclaimer

Northeast Financial is presently in the process of applying for their Mortgage Broker’s license in the state of New York.  Website authorization by the New York State Department of Financial Services is pending.  Until this website is authorized, no mortgage loan applications for properties located in New York will be accepted through this site. If you are a New York Resident – please do not submit any information through our website.

 

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