COURSE INDEXPreliminary Questions
Home Buying Start & Registration
Budgeting To Buy a Home
Find Your First House
Inspect Before You Buy
Shop For a Mortgage Loan
Home Mortgage Loan Process
Credit Score and Credit Report
Home Mortgage Loan Closing
Being a Home Owner
Mortgage Quote Request
Get Started Below!
Qualifying Ratios – As part of the qualifying process, the lender will use ratio calculations to determine whether you have adequate stable income to support the monthly mortgage payments. These calculations are often referred to as debt-to-income ratios. There are two ratio calculations performed by the lender: one to determine the housing debt to income ratio and the total monthly debt to income ratio. To demonstrate adequate monthly income to support the mortgage payment, qualifying top/front ratios (housing to income) will range from a maximum of 28% to 31%. To demonstrate your ability to pay your mortgage and other recurring monthly obligations, qualifying bottom/back ratios (total debt to income) will range from a maximum of 38% to 43%.
To compute the housing expense ratio (top/front), the lender will divide the PITI by the gross monthly income. To compute the total monthly debt ratio (bottom/back), the lender will divide the total monthly debt including the PITI by your gross monthly income.
Using the Debt and Income Worksheet, and a proposed monthly mortgage payment to compute your debt to income ratios.
To bookmark this page, RIGHT click here.
AOL and Internet Explorer users choose "Add to Favorites..." Netscape users choose "Add Bookmark."
Table of Contents | Homebuyer Course Start Page | Find A Realtor | Budgeting To Buy a Home | Neighborhoods | Find Your First House | Inspect Before You Buy | Shop For a Mortgage Loan | Mortgage Home Loan Process | Credit Score and Credit Report | Home Mortgage Loan Closing | Being a Home Owner
© 2007 Financial Firebird Corporation