That’s interesting about your cousin—over 50% DTI is higher than I thought lenders would go. I’ve always heard “43% is the magic number,” but maybe that’s just a guideline now.
Makes me wonder if things like side gigs or freelance income help tip the scales, or if it’s mostly about traditional employment and savings. Has anyone had luck with non-traditional income sources making a difference?Lenders seem to care about the whole picture now, not just one number.
That’s interesting about your cousin—over 50% DTI is higher than I thought lenders would go. I’ve always heard “43% is the magic number,” but maybe that’s just a guideline now.
I’ve heard the same thing about 43% being the “safe” number, but lately it seems lenders are more flexible if the rest of your financials look solid. About side gigs—my experience is they’ll count that income, but only if you can show a consistent history, usually two years’ worth. Otherwise, they tend to discount it or ignore it altogether. Traditional employment still carries more weight, but I’ve seen folks get approved with a mix of W-2 and 1099 income if they can document everything clearly. It’s definitely not as black-and-white as it used to be.
Yeah, I’ve noticed that too—seems like lenders are willing to bend a bit if you’ve got a good credit score or a solid down payment. My buddy got approved last year with a DTI just under 50%, but he had a long work history and some savings. Has anyone here actually had a lender push back on side hustle income? I’ve always wondered how strict they are if you’re, say, driving Uber or doing freelance gigs on the side.
Title: High DTI means automatic denial… right?
Has anyone here actually had a lender push back on side hustle income? I’ve always wondered how strict they are if you’re, say, driving Uber or doing freelance gigs on the side.
That’s a good question. When we bought our place a few years back, my spouse was doing some contract work in addition to her main job. The lender definitely wanted to see a paper trail—like tax returns showing at least two years of that side income. They were pretty strict about it counting as “real” income, even though it was steady. I remember thinking it was kind of silly since the money was coming in every month, but rules are rules, I guess.
But yeah, if you’ve got a solid down payment or strong credit, they seem more flexible on the DTI part. It’s almost like they’re looking for reasons to say yes if the rest of your profile looks good. Still, side gigs can be a gray area unless you’ve got all your ducks in a row with documentation.
Don’t let it discourage you, though—sometimes just having everything organized makes all the difference.
I get where you’re coming from, but I’d actually push back a bit on the idea that lenders are always more flexible if you’ve got a big down payment or great credit, especially when your DTI is on the higher side. When I refinanced last year, my numbers were solid—credit in the 800s, 30% equity, no missed payments ever. But my DTI was just a couple points above their “ideal” range because of some student loans and a car lease. To my surprise, they really zeroed in on that ratio. It didn’t matter that I had a long history of side consulting work with proper documentation. The underwriter still flagged it and wanted extra explanations, projections, even letters from clients.
There’s this perception that as long as you tick enough other boxes, they’ll find a way to make it work. In my experience, certain lenders (especially the bigger banks) are just rigid about DTI limits—almost like it’s a computer making the call. Smaller banks or credit unions might be a bit more human about it, but even then, the guidelines are pretty baked in.
On the side hustle front, I’ve seen friends get tripped up if their gig income fluctuates too much month-to-month. Even two years of tax returns sometimes isn’t enough if there’s a big dip in one quarter or if the income looks “seasonal.” It’s frustrating because plenty of people have steady side gigs these days, but the mortgage world hasn’t really caught up.
I wouldn’t say high DTI means an automatic denial every time, but it’s definitely not just a box-checking thing. Sometimes it feels like you need to show you’re practically overqualified just to get them to look past a slightly high ratio. Maybe things will loosen up eventually, but for now, I wouldn’t count on flexibility unless every other part of your application is spotless and well-documented.
