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Redfin Real Estate Forums :
Bay Area :
Re: debt-to-housing gap ratio
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Re: debt-to-housing gap ratio
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Cav
Redfin Staff
Posts: 50
Registered: 07-03-2007
Message 2 of 5
Viewed 2,636 times
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Hi Questions Abound-
The debt-to-housing gap ratio actually is illustrated by your second example. According to Freddie Mac's website, if a loan is manually underwritten, that gap shouldn't be more than 15%.
Best regards,
Warren
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05-19-2008 04:09 PM
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Re: debt-to-housing gap ratio
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Cav
Redfin Staff
Posts: 50
Registered: 07-03-2007
Message 4 of 5
Viewed 2,510 times
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Hi QA-
One thing to keep in mind is that 15% number may not have as much of an effect on borrowers who have a low debt-to-income (DTI) ratio to begin with. For instance, if your first qualifying ratio is 10%, and the 2nd happens to be just over 25%, lenders are going to take a look at your overall income/reserves situation. Lenders look very favorably on borrowers who have a DTI lower than 28%.
As far as the liability category, lenders look at liabilities on your credit report and not retirement account obligations when it comes to calculating the DTI.
Best regards,
Warren
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05-21-2008 02:17 PM
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Re: debt-to-housing gap ratio
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xynny
Regular Contributor
Posts: 108
Registered: 03-29-2008
Message 5 of 5
Viewed 2,462 times
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Retirement accounts are definitely not liabilities. I count them as savings because that money is ultimately yours. Anyway, good luck with your loan!
- Writer of San Mateo Home Sellers in Trouble
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05-22-2008 12:05 PM
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