Fannie Mae Increases Debt-to-Income Ratio

Fannie Mae will be increasing the debt-to-income ratio from 45 percent to 50 percent on July 29, 2017. Debt-to-income ratio compares your monthly gross income (before taxes) to your total monthly debt payments. This change is a big deal because if a DTI is too high, it is a common mortgage denial. Fannie Mae did a study that concluded with higher DTI ratios will not end up increasing the rate of mortgage default, for example, most people that have a DTI of 45 percent to 50 percent has good credit and are not likely to default.