Posted on: 15th Oct, 2010 11:09 am
I have just been denied by my bank for a home equity due to a 53% debt to income ratio. I am looking for a way around that. Does anyone know the government document that places the restrictions on the debt to income ratio. I know that the guidelines have become more strict and would like to read it for myself.
Thanks
Thanks
Hi Chance,
There are a couple of things that may be effecting your ability to get approved.
1) The lender may have their own "overlay" when it comes to the debt ratio.
For example: A lot of lenders now cap the debt ration at 45% maximum.
2) The automated underwriting system (or AUS). You would have to have an approve/eligible for a lender to even consider approving your loan.
I just closed a VA Jumbo purchase with a 63% back end debt to income ratio because the file was approved through the AUS and I have a lender that actually follows the AUS approval without placing their own cap on the ratios.
There are a couple of things that may be effecting your ability to get approved.
1) The lender may have their own "overlay" when it comes to the debt ratio.
For example: A lot of lenders now cap the debt ration at 45% maximum.
2) The automated underwriting system (or AUS). You would have to have an approve/eligible for a lender to even consider approving your loan.
I just closed a VA Jumbo purchase with a 63% back end debt to income ratio because the file was approved through the AUS and I have a lender that actually follows the AUS approval without placing their own cap on the ratios.