What are income, debt, and mortgage payments?
These are the primary factors that effect whether you qualify for a loan. In order to determine if you qualify for a loan, your lender will calculate two defining ratios: the Housing-to-Income ratio and the Debt-to-Income ratio. The first of the two ratios, the Housing-to-Income ratio, is calculated by dividing the monthly payment of your proposed loan by your gross monthly income. If the resulting percentage falls within a pre-determined range, the lender will then go on to calculate your Debt-to-Income ratio. The Debt-to-Income ratio is calculated by dividing your total monthly debt by your gross monthly income. Once again, if this ratio falls within prescribed limits, the lender will qualify you for the loan. The limits within which your Housing and Debt ratios must fall are determined primarily by the size of the loan, the value of the property, and the ratio between the two (known as the Loan-to-Value ratio, or LTV). This Loan-to-Value ratio is one of the most important factors in
These are the primary factors that effect whether you qualify for a loan. In order to determine if you qualify for a loan, your lender will calculate two defining ratios: the housing-to-income ratio and the debt-to-income ratio. The first of the two ratios, the housing-to-income ratio, is calculated by dividing the monthly payment of your proposed loan by your gross monthly income. If the resulting percentage falls within a predetermined range, the lender will then go on to calculate your debt-to-income ratio. The debt-to-income ratio is calculated by dividing your total monthly debt by your gross monthly income. Once again, if this ratio falls within prescribed limits, the lender will qualify you for the loan. The limits within which your housing and debt ratios must fall are determined primarily by the size of the loan, the value of the property, and the ratio between the two (known as the loan-to-value ratio, or LTV). This loan-to-value ratio is one of the most important factors in
