Key takeaways
- LTV shows how much equity you leave in the home.
- DTI proves you can handle the new payment comfortably.
- Small adjustments before you apply can change the outcome.
Calculate loan-to-value accurately
Divide your proposed total loan amount by the home’s value. Staying at or below 80% opens the best pricing tiers.
If your LTV runs high, consider a smaller cash draw or wait for updated comps that reflect appreciation.
Dial in debt-to-income
Add up mortgages, auto loans, student loans, and minimum credit card payments, then divide by gross monthly income.
Paying down revolving debt before applying improves both DTI and your credit score.
Optimize before you apply
Work with your lender to model how small payoffs shift ratios and potentially unlock better pricing.
Document bonuses or rental income to show the full picture if your base salary doesn’t tell the whole story.
Action plan
Gather income and debt data, calculate both ratios, and strategize adjustments before submitting your application.
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