Debt-to-income Ratio and FHA + Conventional

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Justin Sorsabal of Dignified Home Loans and Megan Bohannan of Bohannan Homes (RE/MAX All Pro)

“Tell me about debt-to-income ratio. With FHA buyers, they always worry that they won’t qualify. Where is the debt-to-income ratio and where does it lie?

Well, it really depends on what type of loan program we’re doing. So, for example, if we’re doing a first time home buyer, with some kind of downpayment assistance program, we really need to keep the debt-to-income ratio around 45%. Depending on the whole package of the file, if we’re not using a first time home buyer program. We can go as high as 55% in most cases.

Oh wow! So, people don’t even know they are elgible, and they’re really elgible.

Yeah, a lot of people think that they need to be below 45% and in some cases even 43% debt-to-income ratio and honestly that’s not the case. FHA is a great product when you have some credit issues maybe or not a lot of money to put down and we can expand a lot of the guidelines to qualify someone and maybe get them into a home.

So another words, stop wasting money renting, put your money into a home.

100%”

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