Let’s begin by addressing what a debt to income ratio is. It’s pretty much like it sounds. It’s factoring in your monthly payments plus the proposed mortgage payment (PITI = principal, interest, taxes and insurance) and home owners dues, if any. Your monthly gross income that is used for qualifying is divided into the monthly debt which produces your DTI (debt to income ratio).
How can a preapproval change?
September 14, 2012 by 2 Comments
When someone becomes “preapproved” for a mortgage, it boils down to they qualify for a certain mortgage payment based on their income and debts (DTI aka debt to income ratio). A home buyer qualifies for the loan amount of the new mortgage and their funds available for down payment and closing cost determine the sales price.
How co-signing on a debt impacts qualifying for a mortgage
June 13, 2012 by Leave a Comment
As a Licensed Mortgage Originator, I often see credit reports where the borrower has cosigned on a debt for a family member or friend. You may be a parent co-signing on your child’s student loans to help them get a better rate, helping your brother buy a car by co-signing the lease or auto loan or perhaps co-signed on a family members mortgage so they can buy a home. They’re going to be responsible for the debt and making the payments and you’re helping them out. Often times, folks don’t realize how this good deed may impact them qualifying for a mortgage down the road. [Read more…]
