Episode 6 - How to Fix a Broken Debt-to-Income Ratio
“Don’t let ‘your DTI is too high’ be the final word—there’s almost always a path forward.” - Nelson Barss
Fixing a “Too-High” Debt-to-Income Ratio: How Utah Buyers Can Qualify Sooner
Buying a home in Utah can feel out of reach when a lender says your debt-to-income ratio (DTI) is too high. We get it—and we don’t think that should be the end of the story. In this episode recap, we walk through a real-world approach we use with clients to lower payments, boost qualifying income, and make room for a mortgage without blowing up your budget.
What DTI Really Means (and Why It Stops So Many Buyers)
A high DTI usually means the total of your monthly debts plus a new house payment is more than the guidelines allow. Many Utah buyers hear “your ratio is too high,” sign another lease, and wait. We prefer a different path: fix what’s broken—now—so you can own sooner.
Our mindset: homeownership is worth some effort and restructuring to make it work.
The Two Levers: Lower Debts and Raise Income
We typically attack DTI from both sides:
Restructure debt to reduce monthly payments
Increase usable income to widen your qualifying room
Often, it’s a combination of several small moves that unlocks approval.
A common profile we see:
Two car loans with high payments
A recreational vehicle payment
Several credit cards + an old consolidation loan
Student loans
Combined gross income of $7,000/month
At first pass, adding a realistic Utah house payment pushes DTI too high. Instead of giving up, we start adjusting line items and testing outcomes until the math works.
If your situation looks different from this profile and you’re thinking “this is still unrealistic for me”, consider booking a free consultation with me to get real time feedback on your exact situation.
Step 1: Lower Monthly Payments (Without Drastic Sacrifices)
Here are moves we often recommend exploring:
Refinance auto loans.
Even if rates are a bit higher today, stretching the term can meaningfully reduce monthly payments. Example: dropping a $725 car payment closer to $375 can free up $350/month toward housing.Press pause on toys.
Selling a recreational vehicle (ATV, trailer, motorcycle) can remove a couple hundred dollars a month. You can always revisit toys later—equity and stability come first.Consolidate revolving debt (again).
Replace multiple credit card minimums with one fixed installment. A single payment with a defined term often lowers your combined monthly outflow and simplifies budgeting.Revisit student loan repayment options.
If you’re eligible, an income-based plan can reduce the qualifying payment used for the mortgage. In our sample scenario, dropping a payment from $354 to around $200 made a real dent.
Every dollar you lower elsewhere is a dollar of house payment you can now qualify for.
Step 2: Add Usable Income (Even Small Increases Matter)
Negotiate or switch jobs for a modest raise.
An extra $500/month can push a borderline file into approval territory.Document side income.
If you’ve been reporting side earnings on your taxes for long enough (e.g., photography, rideshare, eBay), even $500/month can count toward qualifying.Consider a co-signer.
A parent or family member with income and manageable debts can bring the combined DTI into range. Just be sure everyone understands the commitment: they’re equally obligated on the mortgage and their credit is on the line if payments aren’t made.
Pulling It Together: A Better Path to “Approved”
When we applied these moves to our sample buyer, the picture changed dramatically. By lowering non-housing payments and adding a bit of income, a $2,000–$2,500 house payment moved from “impossible” to workable—often without increasing the overall monthly budget compared to renting plus high consumer debt.
The point isn’t perfection; it’s progress that compounds. Small, smart adjustments can create the space you need to qualify for a home in Utah sooner than you think.
Don’t let “your DTI is too high” be the final word. We can review your debts line by line in a consultation, test repayment options, and explore income strategies that fit your life.
Quick Scan: Moves That Often Help Utah First-Time Buyers
Refinance high car payments to longer terms
Press pause on the recreational vehicle (sell now, revisit later)
Consolidate credit cards into one fixed installment
Switch student loans to income-based repayment (if eligible)
Add documented side income you already report on taxes
Bring in a well-qualified co-signer who understands the responsibility
If you haven’t started with our basecamp episodes and have more questions about the process of buying a home, or the benefits of being a home owner, start here with Basecamp 1.