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What to do if my debt to income ratio is 48%

  • October 17 2011 - Castro Valley
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Answers (6)

You should get DU approval on your loan. Most lenders stop at 50% DTI ratio.
  • October 26 2011
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Profile picture for Pierre Tawil
You can lower your debt ratio by doing the following:
1. Pay off some debts.
2. Buy down the rate so you can lower your monthly payment and in turn lower your debt ratio.
3. Do a principal reduction by bringing in money to the closing table.  This will reduce your new loan amount, your monthly payment and in turn lower your debt ratio.
4. Try going with a 5/1 ARM or a 7/1ARM (Adjustable Rate Mortgage).  These offer a lower initial rate for the first 5 to 7 years then turn adjustable there after.  This will work great if you are only planning to keep the mortgage for 5-7 years.

Please note that a 48% debt ratio is high considering Fannie Mae/Freddie Mac guidelines and they would like to see you at 45% debt ratio these days.  FHA is less strict and I've seen loans with a 55% debt ratio approved all day long.
If you need further help please look me up in Zillow.  I am a confirmed lender and I will gladly help.
Good Luck.
  • October 18 2011
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You're fine.

Happy funding, Rudi
  • October 17 2011
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If you have strong credit and reserves approvals to 50% ratio are not uncommon.
  • October 17 2011
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Profile picture for the_country_hick
Pay off some debt so your ratio is lower.
  • October 17 2011
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Profile picture for CA Direct Lending
Have you tried decreasing it by buying down the rate?
  • October 17 2011
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