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Evaluating debt ratios When the Borrowers monthly debt payment to income ratio exceeds 45%, the loan is ineligible for sale to Freddie Mac. As a guideline, the monthly debt payment-to-income ratio should not be greater than 33% to 36% of the Borrowers stable monthly income.
Just like with your original home loan, youll need to have a DTI of at least 50% for a conforming loan refinance and 43% for a jumbo loan refinance. Curious to see how much you could save by refinancing?
In order to exclude non-mortgage or mortgage debts from the borrowers DTI ratio, the lender must obtain the most recent 12 months cancelled checks (or bank statements) from the other party making the payments that document a 12-month payment history with no delinquent payments.
Except in rare circumstances, the Borrowers debt payment-to-income ratio should not exceed 36% for the following Mortgages: Cash-out refinance Mortgages.
There are no limits on the amount of cash back that can be received on a standard cash-out refinance transaction, subject to the maximum LTV, CLTV, and HCLTV ratios. Exception: Student loan cash-out refinances limit cash back to the lesser of 2% of the new refinance loan amount or $2,000.
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Fannie Mae and Freddie Mac buy mortgages from lenders and either hold these mortgages in their portfolios or package the loans into mortgage-backed securities (MBS) that may be sold.
Evaluating debt ratios When the Borrowers monthly debt payment to income ratio exceeds 45%, the loan is ineligible for sale to Freddie Mac. As a guideline, the monthly debt payment-to-income ratio should not be greater than 33% to 36% of the Borrowers stable monthly income.
The LTV limit (known as the loan-to-value ratio limit) for a single-family property is 80%. That means you need to keep a minimum of 20% equity in your home when you do a cash-out refinance.

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