Your debt-to-income (DTI) ratio is a financial measure lenders use to determine how much they will be willing to lend you for a mortgage.
The DTI is determined by dividing your monthly debt by your gross (before taxes) income. If you add your car payment of $375, student loan payment of $380, credit card payment of $210, and divided that by your monthly income of $5,000, your DTI before adding a mortgage payment would be 19.3%. A lower DTI implies a lower risk to the lender, and a DTI of 43% or higher is usually the cutoff to the highest amount a lender would be willing to approve you for.
There are several types of measurable incomes, but the important one for figuring out how much of a mortgage you might qualify for is gross income, what you earn before taxes. Be sure to count the income of anyone you will co-borrow with.
The amount you can borrow is directly tied to your debts. Your debt-to-income ratio is what lenders will calculate before approving you for a loan.
Interest rates affect how expensive of a home you can afford. Your interest rate depends on the type of mortgage you are getting and the current interest rates lenders are offering.
Lenders look at several factors that indicate your ability to pay off the loan. Your credit score helps them determine how easily they can offer you better interest rates.
Your down payment is the cash you put toward buying the home to complete a purchase. The higher your down payment, the lower your mortgage amount needs to be.
You want to be financially prepared when your home warrants sudden repairs. Thankfully, there are home warranties when you first move in, just in case there are unforeseen repairs needed.
Mortgage rates are always changing, click here to see what kind of rate you can currently qualify for
Find the right lender for you, someone who is able to offer you a good rate and who can help navigate you through the escrow processes
Use our mortgage calculator to see what your monthly payments could look like after buying your future home
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Working with Amy and her team from Active Realty has been such a wonderful experience for my husband and I. She is very knowledgeable about the industry and...
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We would like to say thank you to Justin and Active Realty team for doing the super job in selling our house with the price we expected!!! We are very happy with the professional listing and the quick ...
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