What is my Debt to Income Ratio and how do I qualify for a Loan Modification ?

Mortgage and Lending with berryFORMS.com

Today, March 5 2009,  every single news source announced or commented on Obama's housing-rescue plan that would help as many as one in nine struggling homeowners to avoid foreclosure specially for those who owe more than their homes are worth.

This new program introduces a consistent set of rules that mortgage servicers can voluntarily use to more easily modify loans for at-risk customers in whatever combination needed to make their mortgage loans affordable.

To qualify for the program, homeowners must sign affidavits attesting to their financial hardships and servicers with the government help may lower their mortgage payments by exploring a combination of measures to achieve a 31% debt-to-income (DTI) ratio.

Debt-to-Income Ratio is simply calculated by adding all the minimum monthly payments of your current debt ( including mortgage, taxes and insurance ) and divide it by your monthly gross income.

In order to help you ( Homeowner )  to understand how your Lender will calculate you  percentage of income that will indicate if you qualify or not for this helping hand, please click here to download your FREE LOAN MODIFICATION CALCULATOR  ( if this link doesn't work, please input this address in your browser : http://arielsegall.com/loanmodificationcalculator.xls  )

This is an Excel spreadsheet ( about Microsoft Excel ) that will allow you to calculate your current Debt to Income ratio and will allow you to understand how much you should lower to mortgage payment to accomplish 31%

Questions and Suggestions are welcome by commenting on this Blog.

Comments (1)


I was also confused about what exactly this was, but I found a few articles online that helped me figure out what exactly debt to income ratio is and its relevance.  

Hope these help.





Dec 21, 2009 09:33 AM