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Fannie Mae Is Adjusting Acceptable Debt-to-income Ratio

Are you aware that the number one reason mortgage applicants are rejected is their debt-to-income ratio? This means that the potential borrower is strapped with too much debt relative to their monthly income for the lenders to take the risk of approving a mortgage. This ratio is especially a problem for my fellow millennials who are often strapped with student loans.

Here is the good news: Fannie Mae, the country’s largest mortgage money source, will soon be easing its debt-to-income (DTI) restrictions. This change has the potential to open the door to many new buyers who were previously unable to qualify. The DTI ceiling will be raised from its current 45 percent to 50 percent on July 29.

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