Different DTI Calcs on Joint or Married Applicants

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Question:

We use combined DTI for underwriting purposes. Regardless of whether joint applicants are married, unmarried, living in the same household, etc. we would need to be consistent with this underwriting practice and consider combined DTI? We shouldn’t look at individual DTI on unmarried joint applicants who for example don’t live at the same household?

Answer:

First, be consistent, and second do not treat unmarried joint applicants different than married joint applicants. If you are selling to investors review the requirements they impose. Investors typically have the requirements down and then your bank can be consistent with that. As it comes to servicing this debt being applied for, I like “how much would the two of you be able to afford considering your debts and your income?”