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WHAT IS THE MAX DTI ON CONFORMING LOANS
WHAT IS THE MAXIMUM DEBT-TO-INCOME RATIO ON CONVENTIONAL LOANS? I AM HEARING CONFLICTING NUMBERS. IS IT 45% OR 50%?
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The maximum debt-to-income (DTI) ratio of conventional loans typically depends on the lender and the borrower’s financial profile.
Generally:
45% DTI: Most lenders consider this the standard maximum, especially if the borrower has no strong compensating factors. For borrowers with credit scores below 700 FICO, the automated underwriting system will cap the debt-to-income ratio at 45%.
50% DTI: Some lenders may allow up to a 50% DTI if the borrower has higher credit scores, larger down payments, or other compensating factors. For borrowers with credit scores higher than 700 credit scores, the automated underwriting system will approve debt-to-income ratios up to 49.99% on conventional loans.
The exact limit can vary, so it’s important to check with individual lenders regarding their specific guidelines.