Debt-to-Income Ratio Explained (Pt 6 of 6) - DTI too high? Let's fix it!

If a high debt-to-income ratio is creating problems with your loan approval, this video is designed to help. It’s full of ideas that can help lower your debt-to-income ratio and get you approved for the loan you need to buy a home you love.

I walk through the process lenders go through to quantify and solve DTI puzzles, walking step-by-step through an example and a variety of methods to reduce a DTI, including leveraging loan rules, reducing qualifying debt, increasing qualifying income and more.

For more information, don’t miss the full “Debt-to-Income Ratio Explained” playlist:

These videos address every aspect of the debt-to-income ratio: the debt and income sides of the DTI equation, DTI thresholds for FHA, VA, USDA, Fannie Mae Freddie Mac and jumbo loans, how to reverse engineer your DTI and how to optimize your DTI to qualify for the best possible loan terms.

After watching these videos you’ll know everything you need to know about your debt-to-income ratio and how to achieve your homeownership goals!

In this video:
00:00 - Introduction
00:20 - Two reasons to improve your DTI
02:02 - How could changing loan programs help your DTI?
02:30 - Fixing DTI issues requires knowing loan rules
03:43 - Working backwards to find a solution
03:59 - Here’s an example
06:05 - Can we add to your qualifying income?
07:15 - Can we reduce your debt?
07:54 - How far off are we?
08:55 - A larger down payment usually isn’t the best option
10:09 - Pro tip: Which debt to pay off?
12:05 - An idea so crazy it just might work
13:10 - We could try lowering your interest rate
14:43 - We could try switching from Fannie to Freddie
15:44 - Another option that requires even less cash

Julee Felsman, SVP of Mortgage Lending NMLS 120831
Guaranteed Rate Inc NMLS 2611 Equal Housing Lender.

Branch address: 1300 SE Stark St Ste 111, Portland, OR 97214
State Licenses:
AK - AK120831, AL - 73482, AR - 117882, AZ - 1002329, CA - CA-DBO120831, CO - 100514850, CT - LO-120831, DC - MLO120831, DE - MLO - 120831, FL - LO66603, GA - 67474, HI - HI-120831, IA - 34589, ID - MLO-2080120831, IL - 031.0056868, IN - 42483, KS - LO.0039957, KY - MC713848, LA - Licensed, MA - MLO120831, MD - 120831, ME - Licensed, MI - 120831, MN - MN-MLO-120831, MO - MO-120831, MS - 120831, MT - 120831, NC - I-187748, ND - NDMLO120831, NE - Licensed, NH - Licensed, NJ - Licensed, NM - Licensed, NV - 65660, NY - Licensed, OH - MLO-OH.120831, OK - MLO21956, OR - Licensed, PA - 74700, RI - Licensed, SC - MLO - 120831, SD - MLO.09183, TN - 203658, TX - Licensed, UT - 12003187, VA - MLO-41738VA, VT - VT120831, WA - MLO-120831, WI - 120831, WV - LO-120831, WY - 8673

Information provided is for educational purposes only. It should not be construed as financial or legal advice or instruction. Guaranteed Rate does not guarantee or assume liability for the accuracy, completeness, or timelines of the information. You should conduct additional research before making any mortgage related decisions. By refinancing, you may pay more in costs and interest over the extended term. Guaranteed Rate has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency. Sample rate provided for illustration purposes only and is not intended to provide mortgage or other financial advice specific to the circumstances of any individual and should not be relied upon in that regard. Guaranteed Rate, Inc. cannot predict where rates will be in the future.

[Decipher]

Made it all the way through. Very helpful, clear and concise. Thank you!

[MariasHouses]

Wow, great content. Explained so well. Not boring. Very nicely made video!

[MichelMawon]

Great info. I currently have a mortgage and I didn’t know about the 10 payment exception. New sub!

[TashaLouviere]

I watched the set of six. Thank you so much for the explanations.