I’m Michael DiVita (DRE #01372066 | NMLS #241655), DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. When the bank says no, I find a way. Call (800) 239-1103. Pre-qualified November 2026.
The short answer: problems with DTI don’t have to mean no. If your debt-to-income ratio is over a lender’s limit, the fix is usually a different loan structure or a lender with a higher cap. My client’s DTI was too high. 54.6% on a $1.2 million house in San Diego County. Fannie Mae caps at 50%. Every 30-year loan he looked at capped at 50%. We put him in a 40-year fully amortized non-QM loan at 7.25%, which got his DTI down to 53.4%, with a lender that goes to 55%. That was the ticket.
A Good Borrower With One Problem
Client made contact. W-2 employee. Good salary, $175,000 a year. Excellent credit. 20% down with decent reserves. No other debts.
Should be easy, right?
The problem was his DTI. He’d already found a house and talked to other lenders about it, and the payment on that house put him over 50%.
Problems With DTI? What It Means
Your debt-to-income ratio is your monthly debt payments divided by your gross monthly income. For a mortgage, that includes the new house payment: principal, interest, property taxes, insurance and any HOA, plus car loans, student loans and credit cards.
Every loan program has a DTI cap. Go over it, even by a little, and the answer is no. Doesn’t matter how good the rest of the file is.
In San Diego, the Bay Area and most of coastal California, DTI issues usually aren’t about too much debt. They’re about house prices. This guy had zero other debt. The house payment alone did it.
Good Credit, Good Salary. Why Did Everyone Else Say No?
- Fannie Mae caps at 50%. His $960,000 loan is under San Diego County’s 2026 conforming loan limit of $1,104,000, so it falls with Fannie Mae as a high-balance loan. He was at 54.6%. And high-balance rates tend to be higher than jumbo rates, so that didn’t help.
- Fannie Mae doesn’t do a 40-year. 30 years is the max.
- Traditional jumbo usually caps at 43%. Non-QM 30-year will go to 50%. Still not enough.
- He was looking at 7-year ARMs. Didn’t work. Still over 50%.
Nothing brought it below 50.
The 40-Year Loan
So he approached me, and we started talking about 40-year fully amortized mortgages. Fully amortized means you’re paying down principal every month and it’s paid off at the end. Not interest-only. Stretching the loan to 40 years lowers the payment, and a lower payment lowers the DTI. It’s a non-QM loan.
The Numbers
$1,200,000 price, 20% down, so a $960,000 loan. $175,000 salary is about $14,583 a month. Property taxes at 1.25% are $1,250 a month. Insurance, $400 a month. No other debts.
| Loan | Rate | Principal & interest | Total house payment | DTI |
|---|---|---|---|---|
| Traditional 30-year fixed | 6.875% | $6,307 | $7,957 | 54.6% |
| 40-year fully amortized (non-QM) | 7.25% | $6,141 | $7,791 | 53.4% |
The 40-year rate is higher. The payment is still about $166 a month lower.
Still over 50%, though. But the 30-year capped at 50, and I have a few lenders that go to 55% DTI on a 40-year. Good credit, 20% down, reserves, no other debts. He fit. 53.4% is under 55%. That was the ticket.
He Lost the House
Unfortunately, the house he wanted went into contract with another buyer.
But he’s ready to commit with me on the next house he buys, and he knows we have the option to close. Next time he writes an offer, he already knows how it gets done.
DTI Over 50%? Other Ways to Fix It
The 40-year worked for him. Depending on your file, these can work too:
- Pay off a debt. A car loan or credit card balance gone means that payment is out of the math. He didn’t have any, so that wasn’t an option.
- Count all your income. Bonus, commission and RSUs can often be used with the right history.
- Add a co-borrower.
- Put more down. Smaller loan, smaller payment.
- Qualify on assets. Asset depletion turns savings into qualifying income. Some programs, like the one in my asset utilization case study, don’t use DTI at all.
- Find a lender with a higher cap. 43%, 50% and 55% are all real limits at different lenders.
More in my guide to getting a mortgage with a high debt-to-income ratio in California.
Takeaway
- One lender’s no isn’t everyone’s no.
- The loan term can matter more than the rate. Here, the higher rate had the lower payment.
- Know the trade-off. 40 years means more interest over the life of the loan and slower equity. For some buyers it’s still the right move.
- Figure out your financing before you find the house. Get pre-approved with someone who already knows which lender says yes.
You need creative options.
About this case study: this is my own client, pre-qualified in November 2026. The borrower and property aren’t named for privacy. Payment figures use his purchase price, quoted rates and salary, with property taxes estimated at 1.25% of the price and insurance at $400 a month. Loan programs, DTI limits, rates and requirements vary by lender and change often, so treat this as an example, not a guarantee.
Frequently Asked Questions
I have problems with my DTI. Can I still get a mortgage?
Often, yes. DTI limits differ by lender and program: many jumbo loans stop at 43%, Fannie Mae and most non-QM 30-year loans stop at 50%, and some non-QM lenders go to 55%. A longer loan term, such as a 40-year mortgage, can also lower your payment enough to get under a limit.
My DTI is over 50%. What are my options?
Look at non-QM lenders that allow up to 55% DTI, a 40-year fully amortized loan to lower the payment, paying off other debts, adding a co-borrower, putting more down, or asset-based programs that use savings as income. In this case study, a buyer at 54.6% DTI qualified at 53.4% with a 40-year non-QM loan from a lender that goes to 55%.
Why was I turned down for a mortgage with good credit and a good salary?
Usually because of your debt-to-income ratio. In high-priced areas like San Diego and the Bay Area, the house payment alone can push a good earner with no other debt over a lender’s DTI limit. Credit score and income don’t override a DTI cap.
What can I do if my DTI is too high for a mortgage?
Pay off or pay down other debts, count all eligible income (bonus, commission, RSUs), add a co-borrower, put more down, use a longer loan term like a 40-year mortgage, qualify on assets instead of income, or find a lender with a higher DTI limit. A mortgage broker can compare limits across many lenders.
Can I get a mortgage with a 55% DTI?
Yes, with some lenders. A few non-QM lenders allow DTI up to 55% for borrowers with strong credit, a solid down payment and reserves. Fannie Mae generally stops at 50%, and many jumbo programs stop at 43%.
What is the maximum DTI for a Fannie Mae loan?
Fannie Mae generally allows up to 50% DTI for strong files approved through its automated underwriting. That applies to high-balance conforming loans too, like a $960,000 loan in San Diego County.
Does Fannie Mae offer a 40-year mortgage?
No. Fannie Mae’s longest term is 30 years. 40-year mortgages are non-QM loans offered by individual lenders.
Does a 40-year mortgage lower my DTI?
It can. Spreading the loan over 40 years instead of 30 lowers the monthly principal and interest payment, which lowers your DTI, even when the 40-year rate is a bit higher. The trade-off is more total interest over the life of the loan.
Is a 40-year mortgage interest-only?
Not necessarily. A fully amortized 40-year mortgage pays down principal every month and is paid off at the end of the term. Some 40-year programs include an interest-only period; a fully amortized one does not.
Related Resources
- High Debt-to-Income Ratio? How to Still Get a Mortgage in California
- Debt-to-Income Ratio for California Mortgages: Limits and Calculation
- 40-Year and Interest-Only Mortgages in California
- Non-QM Mortgages in California
- 2026 Conforming Loan Limits in California by County
- Mortgage Pre-Approval Checklist for California Buyers
- Case Study: Stacking Non-QM Income for a $1.75M Jumbo
- Case Study: Buying Before Selling With Asset Utilization
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
