Scott Synovic Mortgage Loan Originator Colorado's Mortgage Expert
  • Introduction
  • Agent Resources
  • Colorado's Mortgage Expert
  • Mortgage Refinance
  • First Time Home Buyers
  • CHFA Down Payment Assistance
  • Metro Mortgage Assistance Plus
  • The HomeReady™ Mortgage
  • Mortgage Blog
  • Renovation Loans
  • Mortgage Loans
  • VA Loans
  • Step 1
  • Step 2
  • Step 3
  • Step 4
  • Mortgage Resources
  • Apply Now
  • searchhotspots
  • Contact

Scott Synovic, CMPS
AnnieMac Home Mortgage
303.668.3350

Real Estate Terms: ‘Debt to Income’ Ratio and How It Affects Your Home Purchase

1/16/2016

 
Picture
The real estate market is full of terminology that can make a home purchase or refinance seem more than a little complicated. If you are currently looking for a home and are considering your loan options you may have heard the term debt to Income ratio. In the interest of simplification, here are a few insights on this term and how it can impact your investment.

Determining Your ‘Debt to Income (DTI)’ Ratio


It is important to consider what exactly your debt to income ratio is before your home purchase as this will determine how much you can afford. Calculating your debt to income is fairly simple. Begin with your monthly debt payments, including any credit dcard, loan and mortgage payments. Divide by your monthly gross income to get a percentage. In the event that your monthly debt is $700 and you make $2800 in income, your debt to income ratio is 25%.

What Your Debt to Income Ratio Means To The Bank

The DTI is a very important number when it comes to a home loan because it enables the bank to determine your financial situation. A DTI of 25% leaves some room as most banks will allow for a DTI percentage that runs between 36-43%. In the case of the above example, this means that the most debt this person could take on per month is about $1200. While banks vary on this percentage, credit history also plays an important part in the DTI that will be allowed.

Paying Down Your Debt Or Purchasing A Home

In the event that you have a DTI ratio that exceeds what your bank will allow, you will need to consider your debts before moving on to investing in a home. If you’re planning on purchasing a home in the next year, it’s a good idea to tackle high-interest debt first. However if you happen to have money saved up that you’re planning using for a down payment, it’s worth considering that putting more than 20% down may slightly increase the DTI percentage your bank will accept.

Contact me direct today at 303.668.3350 and I would be happy to assist you with your home loan prequalification at which time we will calculate your debt to income ratio.

Scott Synovic is a top performing mortgage loan originator providing superior levels of service and satisfaction to clients and business partners in Colorado - www.scottsynovic.com NMLS #253799 AnnieMac Home Mortgage #338923

Comments are closed.

    Colorado's
    Mortgage
    Expert

    Scott Synovic, CMPS
    AnnieMac Home Mortgage

    950 Cherry Street
    Suite #1515
    Denver, Colorado 80246

    303.668 3350 Direct

    Picture
    Picture
    Picture
    Picture
    Picture
    APPLY NOW

    Archives

    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015

    Categories

    All

    RSS Feed

popular pages

Refinance
Eliminate PMI
Consolidate Debt
Mortgage Calculators
How Much is My Home Worth?
Interest Rates

Company

About Annie Mac Home Mortgage
Financing Disclaimer
Contact

mortgage insight

join now
Communications Consent
Scott Synovic NMLS #253799 with AnnieMac Home Mortgage NMLS #338923
NMLS Consumer Access. AnnieMac Home Mortgage

950 South Cherry Street, Suite #1515, Denver, Colorado 80246

Equal Housing Lender licensed through NMLS Regulated by the Division of Real Estate. Licensed Mortgage Loan Originator in Colorado and California. Not endorsed or sponsored by either state or any government agencies.
Picture
Picture
Picture
5280 Magazine Five Star Mortgage Professional
Picture
Picture
© Copyright 2020. All Rights Reserved.
  • Introduction
  • Agent Resources
  • Colorado's Mortgage Expert
  • Mortgage Refinance
  • First Time Home Buyers
  • CHFA Down Payment Assistance
  • Metro Mortgage Assistance Plus
  • The HomeReady™ Mortgage
  • Mortgage Blog
  • Renovation Loans
  • Mortgage Loans
  • VA Loans
  • Step 1
  • Step 2
  • Step 3
  • Step 4
  • Mortgage Resources
  • Apply Now
  • searchhotspots
  • Contact