February 17th, 2015 12:50 PM by Leonard Silvestri
This is the day you've always dreamed about. You've made the decision, and you're finally ready to make the commitment and become a homeowner. You've created your dream home board on Pinterest and filled it with everything you think you want in a home. How do you figure out if you can afford to have everything you want in a home? Start with your Debt to Income Ratio.
The debt to income ratio is a simple formula for determining a reasonable amount for your monthly mortgage payment. This formula is widely used throughout the real estate market by lenders and loan officers in the process of qualifying mortgage applicants. The ratio is straightforward and easy to understand. It will calculate the amount of remaining income available each month after all of the recurring debts have been paid. There are several variables within the debt to income ratio, such as the debt limit assigned to each loan category. Debt limits primarily serve as guidelines for lenders to help reduce the risk.
If you're ready to become a homeowner and would like to find out just how much house you can afford call 561-395-4264. Our experienced mortgage officers will help you navigate the home buying process.