You’ve found the house. The offer has been accepted. Inspections are underway, and everyone is looking forward to closing.Then the lender says the property doesn’t qualify for financing
Your DTI Can Derail Your Home Purchase Post
Dated: April 7 2025
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Don’t Let This One Factor Derail Your Home Purchase!
❌ Your debt-to-income ratio (DTI) is a key number lenders use to decide whether to approve your mortgage. This ratio has derailed mortgage pre-approval even for high earners or those with healthy savings.
In fact, 4% of successful home buyers had a mortgage application rejected from a mortgage lender last year, and 40% of those rejections were due to their DTI ratio, according to NAR’s 2024 Profile of Home Buyers and Sellers.
Your DTI is the percentage of your gross monthly income (before taxes) that goes toward debt payments. To calculate it:
➕ Add up all your required monthly debt payments (e.g., credit cards, car loans, student loans).
➗ Divide that total by your gross monthly income.
✖️ Multiply the result by 100 to get your DTI percentage.
For example, If your total monthly debts are $2,000 and your gross income is $6,000, your DTI is 33%.
Lenders typically prefer a DTI of 35% or lower, though some may allow up to 45% or higher.
Your DTI plays a huge role in your mortgage approval, but with a little preparation, you can set yourself up for success. Have questions about your DTI? Let me connect you with a trusted mortgage broker who can help you crunch the numbers!
#HomeTrends #ABR #HomeBuyingTips #DTI #homebuying #buyeragent
Shawn Cox-Mistretta
Shawn Cox-Mistretta is a third-generation Montanan and an experienced real estate professional with over 30 years of helping clients buy and sell homes. Born and raised in Lewistown, she grew up with ....
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