Real Estate Buyer's Guide Part 3

This worksheet will help you determine whether your income qualifies you for the loan amount that you want. For conventional loans, lenders are make two calculations that compare your income and mortgage expenses. These calculations determine your housing ratio and your debt ratio. Your housing ratio is your total monthly mortgage payment divided by your total monthly income. Your debt ratio is a sum of your total monthly mortgage payment and other monthly debt payments divided by your total monthly income. If your ratios are too high, lender may decide to deny your application. If you can demonstrate your ability to carry greater debts, sometimes they’ll let you exceed national standards but not usually by very much. So, as you can see these ratios are very important.

Transcription by: Scribe4you Transcription Services