'The higher your debt-to-income ratio is, the less chance they're going to feel comfortable lending to you,' said Clifford Cornell, a certified financial planner and associate financial advisor at Bone Fide Wealth in New York City. This highlights how critical the DTI ratio is in the mortgage approval process, regardless of income level. It indicates that lenders are cautious if borrowers have a higher ratio, signaling potential repayment challenges.
Other factors that affected homebuyers in the approval process were a low credit score (23%), unverifiable income (23%) and not enough money in reserves (12%), the report found. These factors may collectively hinder applicants, showcasing that DTI isn't the only concern, yet it remains the most significant. This indicates area for improvement for prospective homebuyers prior to seeking a mortgage.
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