None. You should not need to use credit cards for monthly expenses. If you use them for convenience, they should be equal to the budget category you are using them for, such as food, gas, entertainment. If you pay interest on a balance, you are working for someone else instead of yourself.
If you have credit card balances, you should work hard to eliminate them, paying as much as you possibly can without starving yourself or letting other debts grow.
Your debt-to-income ratio is your total monthly debt obligations divided by your total monthly income. Increase your income or lower your debt payments to have a more favorable debt-to-income ratio. How do the credit companies know your income?
See, it has to be a ratio of your total monthly income and your total monthly debt payments. First of all, you should add your monthly income. On the other hand, you have to add your monthly bills e.g. rent, car loan, phone etc. Your total credit card outstanding balance has to be divided by 12 and the figure that you achieve has to be added with your total monthly bill payments. Thus, you arrive at your debt payment each month. You must ensure that your debt payments shouldn't exceed 50% of your earnings. You can use a debt-to-income ratio calculator to know the correct figure.
Add up all your gross income ... Add up all your normal bills, including utilities, car payments, credit card payments. Now divide the bills by the income - the result will be a percentage. The lower that number, the better ... generally if it is above 42%, one is likely not to get that car loan after all.
Yes, your credit line is based on your monthly income your current debt and length of residence at your current address.
You add up all of your monthly income and derive a number. You then add up all of your debt. Home loans, auto loans etc. The difference is your debt to income value. What you are really looking for, and what banks want to know is your monthly debt to income ratio. In this you will take all of your monthly bills. Auto loan payment, rent, phone and every bill you can think of. you add these together. You then look at your total credit card debt and divide this by 12. You add that into your total monthly payments. This is your monthly debt payment. To be considered to be sound as far as banks go, you total debt payments should NT be more then 50% of your income. It used to be 25% of your monthly income could go towards a mortgage or rent. They have moved that number up some, but it is a nice point to aim for.
It is usually calculated on a percentage basis. A total of all your monthly obligations and your income and available assets.
Your debt-to-income ratio is your total monthly debt obligations divided by your total monthly income. Increase your income or lower your debt payments to have a more favorable debt-to-income ratio. How do the credit companies know your income?
If you pull a three beur., credit report it will show all your debt and monthly payments. this is what a lender looks at. All the monthly payments on the credit report. This Would be added to the respective new monthly payment, taxes and insurance of your new loan as a percentage of your gross monthly income. There are two ratios. The top will be the percentage of your new mortgage, property taxes and insurance on a monthly basis of your gross monthly income. The bottom ratio will be this plus all other monthly debt. 28% is great, 40% is somewhat harder, 50% is almost the end. Of course this all do's not matter if you have great credit scores and go Stated. In this case you just say how much you make a month. If you are still in school or taking courses etc. then the shool loans do not count. You would have to get a letter from the school etc. that you are still going.
Total all you monthly debt payments (don't count bills that are not debt's such as utilities, gym memberships, etc) and divide that by your monthly income.
Yes, a minimum income is required. Companies would not be able to offer protection to someone that cannot sustain monthly payments. Also credit is important.
See, it has to be a ratio of your total monthly income and your total monthly debt payments. First of all, you should add your monthly income. On the other hand, you have to add your monthly bills e.g. rent, car loan, phone etc. Your total credit card outstanding balance has to be divided by 12 and the figure that you achieve has to be added with your total monthly bill payments. Thus, you arrive at your debt payment each month. You must ensure that your debt payments shouldn't exceed 50% of your earnings. You can use a debt-to-income ratio calculator to know the correct figure.
No. To calculate your debt to income ratio, add up you total monthly bills (only the bills that will report to the credit bureaus like credit card payments, car loans etc. , do not include the utilities, cell phone bills, insurance etc.) Take your monthly payments and divide them by you monthly income, this will give you the debt ratio. If you owe less than 10 months on an installment loan, most banks will not count that in your monthly debt. (An installment loan is like a car loan...somethingthat eventually you will payoff. Not like a credit card, this is a revolving debt you can payoff and use it again
Add up all your gross income ... Add up all your normal bills, including utilities, car payments, credit card payments. Now divide the bills by the income - the result will be a percentage. The lower that number, the better ... generally if it is above 42%, one is likely not to get that car loan after all.
You monthly payment on a loan is largely based on your monthly income. usually you are expected to pay 15% percent of you income to you debtors or creditors.
Yes, your credit line is based on your monthly income your current debt and length of residence at your current address.
A debt-to-income ratio is the percentage of a consumer's monthly gross income that goes toward paying debts. There are two main kinds of DTI, as discussed below.Two main kinds of DTIThe two main kinds of DTI are expressed as a pair using the notation x/y (for example, 28/36). The first DTI, known as the front-end ratio, indicates the percentage of income that goes toward housing costs, which for renters is the rent amount and for homeowners is PITI (mortgage principal and interest, mortgage insurance premium [when applicable], hazard insurance premium, property taxes, and homeowners' association dues [when applicable]).The second DTI, known as the back-end ratio, indicates the percentage of income that goes toward paying all recurring debt payments, including those covered by the first DTI, and other debts such as credit card payments, car loan payments, student loan payments, child support payments, alimony payments, and legal judgments.[1]ExampleIn order to qualify for a mortgage for which the lender requires a debt-to-income ratio of 28/36: Yearly Gross Income = $45,000 / Divided by 12 = $3,750 per month income. $3,750 Monthly Income x .28 = $1,050 allowed for housing expense.$3,750 Monthly Income x .36 = $1,350 allowed for housing expense plus recurring debt.
Sub prime can be used in two aspects 1. Sub prime customer - A customer who does not have a great credit history and does not have the income to pay the monthly mortgage payments on the loan he is asking for 2. Sub prime Loan - A loan that is granted to a sub prime customer If you have a monthly income of $10000 and you ask for a mortgage loan with monthly payment of $4000 then you are a good customer If you have a monthly income of $4000 and you ask for a loan with monthly payment as $10000 then you would be a sub prime customer