Qualifying DTI Ratio

1 Reply

Please assist. I'd like to review my financials prior to setting up an appointment to obtain a pre-approval letter.

At this time my credit is 680 with and I have about $20k to invest.


Upon calculating my DTI I'm unsure of which debts would be considered mine. I'm married, my primary and rental property is in my name along with my student debt and a few credit cards.

My husband has all of our cars in his name and more credit cards.

We live in California (community property state).

I'd like to enter the loan on my own. Is there a loan that will only look at my debts and not my spouse? If so, my DTI is 46% is there any lender willing to go up to 46%?

Any advice is greatly appreciated.

@Jacklin Jackson some quick tips here for you:

  • If you are using a Fannie Mae or Freddie Mac type of loan (if you recognize those names) then your personal income and your personal debts matter.  If you aren't using that type of money....then it won't. There are many "portfolio" or "commercial" types of loans that will just use the cash flow of the property for your income.  So your debts won't matter!
  • If you do choose to go the Fannie/Freddie route (or can qualify) then your loan will have better terms.  With Fannie/Freddie whomever is on the loan...then that's who counts.  So NO SPOUSE debts with Fannie/Freddie.  However, while you may not be on the LOAN for your primary home...you might be on the DEED. Many states are "community property" states.  And since California is one of those states...then the property taxes and property insurance would be held against you...well, at least 1/12th of them would since we are doing a monthly calculation.  And the drawback here is that it's not split 50/50...you are responsible for 100% of it...even if you and someone else own it together. 
  • Generally, speaking 45%-50% will get you in the door for DTI with Fannie loans....however, you will absolutely need a lender to do this calculation because of your rental income. Your rental property is on your tax returns (hopefully) and there is a specific calculation to use to find out how much of that income can be used.

Hope some of this make sense.  Thanks!

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