Robert McLister·General·November 30, 2007Debt Service Ratios Easing Certain lenders have slowly been loosening their debt service requirements. That’s making it easier to qualify for a mortgage. Here’s why… Lenders have long relied on two standard measures of one’s “ability to pay”: Gross Debt Service (GDS): The percentage of the borrower’s income that is needed to make all payments for costs associated with housing. Total Debt Service (TDS): The percentage of the borrower’s income that is needed to cover housing costs (GDS) plus any other loans that an individual has, such as credit cards and car payments. The acceptable ratios for both have generally been 32% and 40% respectively. Now, various lenders are dropping GDS requirements altogether and bumping their acceptable TDS ratios up to 44%. On an exception basis, clients are sometimes approved with TDS ratios of 46% or more. If you’ve got a big enough down payment, at least one lender will even waive their GDS/TDS requirements completely. It’s all a product of competition, and competition is getting fierce in the mortgage biz. Sources: Chronicle Herald, CAAMP Like news like this?Join our CMT Updates list and get the latest news as it happens. Unsubscribe anytime. SUBSCRIBE! Thank you for subscribing. One more step: Please confirm your subscription via the email sent to you.