The refi prequal letters I've been getting all indicate a 40% DTI will get me the best rate.Hey hol,Appears you have your answer on how DTI is calculated with regards to credit card balances that get paid in full each month. I know your concern is based on being near the 40% DTI. I've not heard that number used in the past. On Conforming loans under $417,000. my understanding is there is a hard stop at a 45% DTI. You probably have plenty of space. On loans that are conforming, but at the next loan size threshold ($417,001 up to $625k) my understanding is that DTI has a hard stop at 41%. However, these are the guidelines my bank uses and other lenders may have different guidelines.The one item I find confusing is an interest rate being based on DTI. There are many variables involved in determining rate, but on a Conforming loan I do not know of any bump to rate based on DTI at various thresholds. You're either under 45%, or declined.
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