Your debt-to-income ratio is a key factor in determining your ability to qualify for a mortgage. It's a measure of how much you owe each month compared to how much you earn. To calculate your debt-to-income ratio, you'll need to add up all of your monthly debt payments (such as your estimated mortgage, credit cards, student loans, and car loans, etc.) and divide that by your gross monthly income. The resulting percentage is your debt-to-income ratio.
Most lenders prefer to see a debt-to-income ratio of below 43%, but there are some programs that allow for higher ratios. If your debt-to-income ratio is too high, it may be challenging to qualify for a mortgage or to secure favorable loan terms.
Our team can help you calculate your debt-to-income ratio and provide guidance on which loan programs you may qualify for based on your ratio. It's essential to keep your debt-to-income ratio in check, as it's a critical factor in determining your financial health and your ability to repay a mortgage.