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Debt Ratio

As a mortgage lender, one has a responsibility to provide homeowners with a loan they can afford. This is why each program has a maximum debt ratio which must be met. Depending on the type of program, the debt ratio needs to be under 65%, 50%, or 35%. This means that all of your revolving, installment, and mortgage payment together cannot exceed the debt ratio guideline of your monthly income.

Example:

• Credit card payment: $300
• Car loan: $400
• Mortgage Payment: $1500
• Total Payment $2200

To qualify for a loan program with 50% debt ratio, all of the borrower's income needs to add up to at least $4400.

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To find out what you need to do to qualify for a loan, click
> QUALIFYING FOR A LOAN <

What is a loan really going to cost you? To find out, click
> TRUE COSTS OF A LOAN <

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