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The next most important factor are your mortgage debt ratios. Lenders look at your DTI to make sure that you have enough disposable income to cover the daily cost of living.

Each program has its own debt ratio requirements.

  • Conventional Loan – Just as we said with the credit scores, conventional lenders have the toughest guidelines. You need a maximum housing ratio of 28% and a maximum total debt ratio of 36% when applying for a conventional loan.
  • USDA Loan – USDA loans have slightly stricter debt ratio guidelines than the FHA. The USDA allows a front-end or housing ratio of 29% and a total debt ratio of 41%.
  • FHA Loan – FHA loans have more flexible debt ratio guidelines. Your housing ratio can be as high as 31% of your gross monthly income. Your total debt ratio can be between 41% and 43% in order for you to qualify.
  • VA Loan – Just as the VA doesn’t have minimum credit score requirements, they also don’t have maximum debt ratio requirements. They do prefer that your total debt ratio doesn’t exceed 43%, but that’s their only requirement pertaining to debt ratios.

What are the General Mortgage Requirements for First-time Homebuyers?

Below we help you understand the basic guidelines so you can prepare yourself financially to help lead you down the right path to Homeownership!

  1. Return to Buying Your First Home
  2. Assets & Reserve Requirements
  3. Credit Score Requirements
  4. Debt Ratios
  5. Stable income & Employment
  6. Down Payment



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