Welcome back to our series laying to rest some of the myths associated with homebuying and mortgages. Today, we tackle the idea that you can’t get approved for a mortgage if your debt-to-income ratio – your monthly debt payments divided by gross income over that time – is higher than thirty-six percent.
A DTI ratio over thirty-six percent isn’t a disqualifier from a home mortgage. While lenders do prefer ratios of thirty-six percent or less, there are loans available for those in the thirty-seven to forty percent range. Qualified mortgages are typically available to those with DTI ratios under forty-three percent.
You should make sure you’re on sound financial footing before receiving a mortgage to protect your long-term financial health. Your debt-to-income ratio acts as a helpful barometer of your comfort level.
Thanks for watching, and stay tuned for more home loan insights.