DTI requirements clarification needed

[Justin Mespelt]

I'm in need of clarification as to what banks look at as income when calculating your DTI ratio, specifically for a primary residence HELOC. First, around 38% of my gross W2 income the last 2 years was earned working overtime. Will a bank take that into account as income, or is the ratio only looking at base pay? Secondly, for 4 years before last fall, my wife was self employed. Beginning last fall she is a substitute for multiple school districts. She works steadily, just not with any single employer or on a set schedule. That makes it almost impossible to verify income with less than a full years taxes to look at.

What front/back ratios are banks looking for when applying for a HELOC?

Thank you

[Chris Mason]

HELOCs have no Fannie/Freddie-equivalents, they are free to make up their own internal criteria that can be whatever they want it to be. No two banks are the same, they are all different. You're going to have to call around and ask.