Hi {first_name},

I hope you're having a great day.

We've made it to the final question of the Top 5 Questions You Should Ask Every Loan Officer. We've covered quite a bit of ground and many topics over the last couple months.

But quite honestly, today's question is probably the single most important one I've been asked hundreds of times over and over again.

In my last email we talked about what's more important: rates, fees or points. And today we are going to discuss what the determining factors are that allows someone to get approved for a loan.

What Determines If Someone Gets Approved For A Home Loan?

One of the single biggest defining factors is your DTI. Your Debt-To-Income (DTI) ratio is the first and most important thing we look for in being able to confidently approve you for a home loan.

DTI is calculated by taking the total house payment (principal and interest, taxes, insurance), adding all long-term debt payments (any that will continue for more than 10 months), and then expressing that sum as a percentage of the gross monthly income.

For a conventional loan, 50% is the maximum value, but some loan programs may allow a higher DTI.

The lender also looks at the Loan-To-Value ratio (LTV) or the loan amount expressed as a percentage of the home’s value. If it’s a purchase, the lender will use the lower of the appraised value or the contract price. And if the LTV is higher than 80%, the borrower will have to pay mortgage insurance.

Next, the lender looks at income. Is it stable? Has the borrower been in the same line of work for at least two years? If self-employed, can the person document income from tax returns? Lenders will use the net income from the tax returns, not the gross, plus they typically average the last two years’ net income.

Whether you're a first-time home buyer, looking to buy a second home, refinance your existing loan or find the home of your dreams ~Contact.Company~ has the knowledge and years of experience to provide you with a loan that fits your exact needs.

If you have any questions or would like to speak to me personally please don't hesitate to reach out.

Sincerely,