What's YOUR Debt To Income Ratio?

Having a monthly mortgage payment you can realistically afford is CRITICAL for financial balance. We think we can all agree on that, but how does that payment get determined? Have you ever wondered how a mortgage company at the Lake of the Ozarks figures out what your monthly payment will be? If so, this is the blog for you!  Lenders use a ratio called "debt to income" to decide your maximum monthly payment after you have paid your other recurring loans. Keep reading this week's blog to learn more about how the debt to income ratio works. If you looking to apply for a mortgage at the Lake of the Ozarks and need some help from an EXPERIENCED lender, please call MHQ - Mortgage Headquarters of Missouri. We can be reached at (573) 302-9990. You can also find more mortgage information on our website at www.MHQMortgage.com.

How To Figure Out Your Qualifying Ratio

Usually, underwriting for conventional loans requires a qualifying ratio of 28/36. An FHA loan will usually allow for a higher debt load, reflected in a higher (29/41) qualifying ratio.

For these ratios, the first number is how much (by percent) of your gross monthly income that can go toward housing costs. This ratio is figured on your total payment, including hazard insurance, homeowners' dues, PMI - everything that makes up the full payment.

The second number is what percent of your gross income every month that should be applied to housing expenses and recurring debt together. Recurring debt includes vehicle loans, child support, and monthly credit card payments.

Examples:
With a 28/36 qualifying ratio

Gross monthly income of $2,700 x .28 = $756 can be applied to housing
Gross monthly income of $2,700 x .36 = $972 can be applied to recurring debt plus housing expenses
With a 29/41 (FHA) qualifying ratio

Gross monthly income of $2,700 x .29 = $783 can be applied to housing
Gross monthly income of $2,700 x .41 = $1,107 can be applied to recurring debt plus housing expenses

If you want to run your own numbers, we offer a Mortgage Loan Qualification Calculator.


Qualifying For A Mortgage at MHQ - Mortgage Headquarters of Missouri


Don't forget these are only guidelines. We will be happy to help you pre-qualify to determine how much you can afford. At Mortgage Headquarters of Missouri, Inc, we answer questions about qualifying all the time. We also will work with you and help you determine the best solution for your mortgage needs. Don't go into this important process blindly and know ALL your options. Give us a call: (573) 302-9990. You can also stay up to date on our latest announcements by following our social media channels listed below. Check out our website at www.MHQMortgage.com for helpful information on understanding mortgages and how the application works.



Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065

Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917

NMLS # 1229111

www.MHQMortgage.com



Follow Us On:   Facebook   |   Twitter   |   LinkedIn
Location: Osage Beach, MO 65065, USA

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