Refinance - lower DTI

[lovingit]

I tried refinancing but my DTI was too high.  My loan officer reached out recently to see how things are going.  My income has not changed.  He asked me if the equity on my house increased and I told him that property values have increased.  He said that might help.

I don't understand.  I thought there were only two ways to lower DTI

There are two ways to lower your debt-to-income ratio:

1- Reduce your monthly recurring debt
2- Increase your gross monthly income (or a combination of the two)

So what does an increase in the property value (equity) do to help qualify?

 

[sgip]

Some lenders - and there are very, very few of them remaining - will accept whatever their Automated Underwriting System (AUS) fires and bypass stricter underwriting rules. Example:

80% LTV and the AUS engine says you need tax returns. Tax data has 2106 expenses that decrease your income so you can't qualify.

70% LTV and the AUS says you only need paystubs and W-2's. The 2106 expenses don't factor in because tax returns aren't asked for.

My .02c