Home buyers and a Co-signer.

 Debt-to-income ratio (DTI) is an important factor lenders use when determining whether to approve a home loan. It measures the percentage of a borrower's monthly gross income that goes toward paying debts.

There are two types of DTI ratios commonly used:

1. Front-end ratio (also called housing ratio): This looks at how much of a borrower's income goes toward housing costs, which includes mortgage payments, property taxes, homeowners insurance, and, in some cases, homeowner association fees. Ideally, lenders prefer this ratio to be no more than 28% of gross monthly income.

2. Back-end ratio: This includes all debt obligations—credit card payments, car loans, student loans, personal loans, and housing costs. Most lenders like this ratio to be below 36-43%, though some may allow higher ratios depending on other factors, like credit score or down payment size.

   
   

A lower DTI signals to lenders that you're in a good financial position and are more likely to repay the loan, while a higher DTI might make it harder to qualify for a mortgage.

Sometimes buying a house takes longer than one expects.

A Co-Signer might be an option to consider.

Here's what is typically expected from a co-signer:

1. Good Credit: Most lenders prefer a co-signer with a credit score of 700 or higher to improve the borrower's chances of approval. A higher credit score demonstrates reliability and lowers the perceived risk for the lender.

   
   

2. DTI Ratio:

   • Lenders generally prefer a co-signer with a DTI ratio of 28% or lower for their front-end DTI (housing costs) and 36% or lower for their back-end DTI (total monthly debts). However, some lenders may accept slightly higher DTI ratios, especially if the co-signer has a strong credit profile.

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3. Stable Income: A co-signer should also have a stable income to show they can afford the debt if the primary borrower is unable to make payments.

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Why the Co-signer's DTI and Credit Matter:

• Good credit reassures the lender that the co-signer can handle financial responsibilities.

• A low DTI ratio shows that the co-signer has enough income to cover their own debts while also potentially covering the loan if needed.

Overall, a strong co-signer with a good credit score and a low DTI can significantly improve a buyer's chances of getting approved for a home loan.

Thinking about selling your home — even in the future?

What you do right now can make a difference of thousands of dollars when you do sell.

Here are 3 FREE services to help you get Top-Dollar later:

1️⃣ Pin-Point Price Analysis – a detailed, specific price estimate for your home, not just a broad range.

2️⃣ Room-by-Room Review – personalized advice on which fix-ups will give you the best return (and which you can skip).

3️⃣ Silent Market Option – discreetly test your price before going public with Compass Private-Exclusive listings.

⏰ It takes about an hour.  

📞 Call me at 754-273-0265 or 📧 email cecilarosa1@gmail.com to schedule a time that works for you. Monday tru Fridays 1 pm to 5 pm.

Looking forward to helping you achieve your real estate goals,Cecilia La Rosa, Realtor