What is a Debt-to-Income Ratio?
It is very important to know your debt to income ratio, but it is especially important to know it if you're thinking of buying a home. When applying for a mortgage loan, lenders will look at your debt-to-income ratio to determine if you are credit-worthy.
To calculate your debt-to-income ratio just divide your monthly minimum debt payments (excluding mortgage or rent payments) by monthly gross income. See below:
You typically want to keep your debt-to-income ratio below 15% to have a higher chance of being approved for a mortgage loan. To get a better understanding of your debt-to-income ratio give us a call at (703) 596-8889.
If you, or someone you know, is looking for a Realtor who specializes in Northern VA real estate, feel free to give us a call today at (703) 596-8889! Denae Judd & Associates knows the market inside and out and we would love the opportunity to serve you.
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