Jumbo Mortgage with Debt to Income Ratio Over 43%
Can you get a Jumbo Mortgage with a debt ratio above 43%?
Yes, it is possible to get a Jumbo mortgage with a debt to income ratio above 43% . In fact , Jumbo mortgages are available with debt to income ratios up to 55%. To get more information about these programs fill out the quick quote form.
How do you calculate a debt to income ratio on a Jumbo Loan?
To simplify, a debt to income ratio is your monthly debts divided by your month income. If you had $10,000 per month in monthly payments and $20,000 in income your debt to income ratio would be 50%. Typical items that are included in debt are the housing payment, loss on rental properties, student loans, car payments, credit card payments, and child support. There are more , but in general any debt that you pay on a monthly basis is included. On the income side you would count your own income from your job plus and social security, child support, or regular income you have received. The analysis gets much deeper than this at the underwriting level, which is why it’s important to get preapproved.
Why do most Jumbo lenders limit Debt to income ratio at 43%?
This has to do with the Qualified Mortgage Rule which took effect Jan 10th 2014. When lenders make “Qualified Mortgages” which follow certain rules , the lender gets some protection against lawsuits from consumers. One of those rules is that the debt to income ratio on a jumbo mortgage can be no more than 43% to be considered “QM. Any loan made outside these rules is considered “Non-QM”
Ready to see if you qualify under these special programs? Fill out a quick quote form and we will be with you shortly.