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Question for the Money Doctors

Question submitted on Apr 14, 2020.

Question

In the current market, which is more important, DTI ratio or payment history? My husband and I want to apply for a mortgage later in the year. He has a good credit history with a FICO score of 730. I've recently payed off my debt except student loans, but my payment history isn't the best. Which will have a greater impact on approval for a mortgage?

Answer

Good job paying off most of your debt. Each mortgage lender applies their own criteria, but payment history is certainly part of the review.  Debt to income ratio is not part of your credit score, but many lenders review your total credit compared to your income.  If your past credit score "isn't the best" as you say, then make sure that your payment history is good for the rest of the year before your apply for your mortgage.  Good luck with your mortgage and new home.


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