01/25/2024
Your debt to income ratio is key in a mortgage for home purchase and also in refinance of mortgages
Calculation of your Debt-to-income (DTI) will be one of the key factors in determining your interest rate. Also considered is credit score, loan amount, down payment, loan term, interest rate type (fixed or adjustable), and loan type.
The lower your debt to income is monthly the better rate that is available you will qualify for.
Different loans also have restrictions on what the DTI can be. Typical highest you can qualify for a mortgage will be 50% with a ver limited option and higher interest rate. This typical requires a proof of saving equal to 6 months worth of housing expenses.
Most conventional loans DTI can be no more that 45%
The lower you DTI you can establish while in the home buying process the better position you will be in for your mortgage rate.
Please DM me if you have any question or need a mortgage reference for pre-approval/pre-qualification.