Can You Qualify for a Loan in Southwest Ohio?

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How do you know if you can get a loan or how much home you can afford to buy? You need to understand debt-to-income ratios in order to find out. Here are three simple steps to finding your debt-to-income ratio:

1. Determine your annual gross income. Divide that number by 12.

2. Determine your long-term debt. Figure out what the mortgage would cost, including principal, interest, and taxes. Other examples of long-term debt include school loans or car payments. Calculate how much you spend on these monthly payments.

3. Divide your monthly debt by your monthly income. This is your debt-to-income ratio. Ideally, your ratio should not exceed 35%. If your debt-to-income ratio is 35% or less and you have a good credit score, you have a decent chance of being approved for a mortgage loan.

If you have any questions about this process, give me a call or send me an email. I would be happy to help you.