What is a Debt-to-Income Ratio?
One of the quickest & most revealing ways to get a handle on your current financial picture is to calculate your debt to income ratio.
Lenders look at your debt to income ratio when they are considering if you are credit worthy.
Your debt to income ratio is calculated by dividing monthly minimum debt payments, including your proposed mortgage payment by your monthly gross income.
For example, a couple with a combined monthly gross income of $7,500 making minimum payments of $800 on loans and credit cards, that has a proposed mortgage payment of $2,300 has a debt to income ratio of 41% ($800+$2300/$7500 = .41)
Call us today and we can help you determine your debt to income ratio!