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Typically 50% Debt to Income ratio. Some lenders will let you go higher. For example I have gotten customers approved with a DTI ratio of 124%, but the customer had over 500K in retirement funds and a medium credit score of 803 and the Loan to Value was only 60%. A lot of different factors go into providing an approval to a customer. What I would recommend is to call your local bank and see if you can do a free pre-approval to see if they can get you approved based on your particular situation. The original question pertains to DTI ratios for mortgages. The standard "front ratio" is 28 percent. To calculate the front ratio, divide the total payment (principal, interest, insurance, and taxes) by your gross monthly income. If it's over 28 percent, you may not be eligible for conventional mortgages. The standard "back ratio" is 36 percent. To calculate the back ratio, add up all your monthly debt -- mortgage payment, credit cards, school loans, car payments, etc. -- and divide that by your gross monthly salary. If that is more than 36 percent, that may also disqualify you.

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โˆ™ 2007-02-01 21:54:57
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Q: What is the highest debt to income ratio you can have and still get approved for a mortgage?
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If a property has a rent payment equalling its mortgage payment does that become a non-factor in debt to income ratio?

Not if you are trying to get approved for a mortgage.The way mortgage underwriting guidelines treat rental income is to give credit for 75% of the monthly rent. This is done to account for maintainence and vacancy throughout the year.If you're charging $1,000.00 per month for rent, a lender will allow $750.00 to be credited towards your debt to income ratio. Using the example above, you will have a loss of $250.00 per month which will affect your debt to income ratio.

Is it hard to get a mortgage loan?

No, unless you have a high debt to income ratio.

What 2 ratio does mortgage lenders use to evaluate your ability to pay a loan?

debt to asset ratio income to outgo ratio

What is the maximum percentage of a borrower's income that can be used to make the monthly mortgage payment called?

Debt to income ratio

What is the median income of the state that has the highest computerhouse ratio?


If you cosign a mortgage now will you be affected when you refinance your house?

Yes. When getting approved for a loan, you have to fit into certain criteria. There is something called your Debt to income ratio. This ratio determines if you can afford the loan. If you co signed on a loan, that mortgages payment will go against your income for your debt ratio, and unless your making a lot of money it could ultimately hurt your chances of getting a loan.

What are the requirements for a no fee remortgage?

The requirements for a no-fee refinance mortgage are being in good standing with your current mortgage, having sufficient income, and having a good debt-to-income ratio. The requirements for a no-fee refinance mortgage are essentially the same as for any other type of mortgage.

Your debt to income ratio is too high will having a co-signer improve this ratio for a mortgage?

It can as long as the cosigner doesn't have a lot of debt.The lender will add the income and debts of all parties on the loan application to calculate the total debt to income ratio.

How does increased debt affect the debt ratio?

Your Debt/Income Ratio is simply your total monthly mortgage + installment + revolving debt payments divided by your total month gross income. eg. If your income is $4000 / month, your mortgage payment is $1000/mo, Auto loan is $500/mo, and total credit card minimum payments are another $500/mo, then your debt/income ratio is $2000 / $4000 = 0.5 (50%) In most cases mortgage lenders do not like debt ratios over 45%.

Can a person with lower income and good credit still get a mortgage without a cosigner if their down payment is large?

As long as their debt to income ratio is low enough. Generally your mortgage payment should be 25-35% of your net income (what you actually bring home)

Taking Advantage of Refinance Mortgage Companies?

With interest rates as low as they are, now may be an excellent time to refinance your mortgage. While many mortgage lenders have tightened their underwriting standards, there are still many refinance mortgage companies that are willing to give out a refinance mortgage. To get your mortgage refinance through one of these companies, there are various underwriting criteria that should be met. The first piece of underwriting criteria that should be met in order to have your mortgage refinanced is to have a good credit score. While in years past many mortgage refinance companies were willing to refinance a mortgage for anyone with a credit score over 620, the high rate of default for people with bad credit has tightened their underwriting. Today, getting a better interest rate from one of these refinance companies will require you to have a credit score of 740 or better. However, those with scores between 680 and 740 could still be approved for a mortgage refinance, but they will pay a higher rate. The second piece underwriting criteria that should be met in order to have your mortgage refinanced is to have a sizable down payment. When underwriting standards were looser, many borrowers were able to get mortgage loans with as little as 0% down. Today, mortgage refinance companies will require at least 10% equity in the home. Since housing prices have fallen across the country, you may have a hard time getting a mortgage refinanced even if you used to have equity in your home. To get approved for the refinance, you may need to put forth another down payment. The third piece underwriting criteria that should be met in order to have your mortgage refinanced is to have a low debt to income ratio. A debt to income ratio is a measurement of your monthly housing debt divided by you monthly gross income. In years past, a person could be approved for a mortgage if their debt to income ratio was less than 40%. Due to the tightened underwriting standards, the debt to income ratio requirement has dropped to around 30% for most lenders. This may require you to purchase a cheaper home.

Does a timeshare have to be included in your debt to income ratio when applying for a mortgage?

If you have a monthly payment, then the amount needs to be included. The lender is doing this so that they know you have the money to pay the mortgage, and that you are not financially overextended.

What are some common problems that will get you denied for a mortgage?

Some of the common problems that will get you denied for a mortgage would be: an insufficient down payment, high debt-to-income ratio (DTI), and negative credit history.

How much income do I need to buy a home?

It depends on your recurring monthly debt (minimum monthly payments). This number divided by your gross monthly income give you your debt-to-income ratio. This ratio can be no higher that 57 (but in most instances 45) with the proposed new mortgage payment in order to qualify.

How much income do you need to buy a house?

It depends on your recurring monthly debt (minimum monthly payments). This number divided by your gross monthly income give you your debt-to-income ratio. This ratio can be no higher that 57 (but in most instances 45) with the proposed new mortgage payment in order to qualify.

Whose FICO score is used on a joint mortgage?

The person that makes the most money is the FICO score that will be used to determine your interest Rate. Mortgage lenders will ALWAYS use the person who has the highest income as the primary borrower. Sometimes in the case of married couples it is better to only use one spouse (who ever has the higher score) as long as the income from one will satisfy the debt-to-income ratio required by the lender. The higher score will generally affect the interest rate while the income does not. ...and some lenders will use the lesser of the credit scores reguardless of income.

Would you be approved for a 150000 home with a credit score of 633 and an income of 33000 per year What about with a co-signer?

Yes, you do qualify for a mortgage in your current situation. On a standard 30 yr fixed mortgage your payment accounts for 32% of your gross income. The only concern is that your total debt obligation including your new home payment doesnt exceed 50 or 55%. Even so, with your current scores you an have to option to state your income and resolve your debt to income ratio problem, if there is one. There are several programs that I can make available to you. Eloy Benavides

How do you calcute debit to ratio?

Your debt-to-income ratio compares the amount of your debt (excluding your mortgage or rent payment) to your income. To figure this out it is easiest to use monthly figures. Take you monthly bill amount and divide it by your monthly take home pay this will give you a decimal number which is your percentage of debt to income.

What is a monthly debt to income ratio?

A Debt-to-income ratio is a ratio that the banks calculate and take into account to examine your loan eligibility via your gross monthly income. Here, the higher the DTI ratio, the lower the chances of you getting approved for a fresh loan In simple words, prior to the bank approving your loan application, they would examine your repayment capacity via calculating the debt-to-income (DTI) ratio. Mostly calculated in percentage, the DTI ratio is obtained simply from your net monthly debt payments (such as credit card bills, education loans, auto loans, personal loans, etc), by your gross monthly income. I've read a blog on this topic Debt To Income Ratio for more detailed understanding visit this blog.

Where is a reliable online debt to income ratio calculator?

Money always provide independent income advice.They can offer this service and help you find the up to date mortgage offers that best suit your needs.

What is income ratio in mutul fund industries?

income ratio of a mutual fund is defined as a ratio of net investment income to its average net asset value.

What is meant by the term ratio of the end to the mean?

The term ratio of the end to the mean refers to the ratio that indicates what portion of a person's monthly income that goes towards paying debts. The credit-card payments, child support, and mortgage payments are examples of these debts.

When is mortgage considered high ratio in Canada 20 or 25?

A mortgage with less than 20% down payment is considered high ratio.

Can you buy a second home without selling your first?

Yes, No, Maybe...YES if you can afford to own 2 homes...NO if you can't afford them both. MAYBE if you can pay cash or qualify for a mortgage. Do you have a mortgage on the 1st home? What's your debt to income ratio with owning the home you have now? and What's your debt to income ratio if you owned the second home? If you need a your bank or mortgage broker, if they can help, they will. You can own as many homes/houses as you's a matter of can you afford them? What is your purpose for a 2nd, 3rd home...rental, vacation home, etc...?

Can you change your debt to income ratio?

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?