Good afternoon!
You may have heard of the term "Debt-to-Income Ratio". It's the amount of monthly debts as a percentage of gross monthly income.
But what counts as "monthly debt"? Well, it's not your cell phone bill OR your electricity OR your Netflix bill.
It's things that would show on your credit report: credit cards, student loans, auto loans, mortgages, etc.
So you take those monthly debts, add your prospective mortgage payment on top of that, and then divide that sum by your gross monthly income.
Example: credit card monthly payments are $100 and your car payment is $500 = $600
The house you're looking to close on will be $1,500 per month. So add them together and you get $2,100.
If you make $4,200 gross income every month, then your Debt-to-Income Ratio would be 50%. That's right at the limit for FHA Loans if your FICO score is less than 680.
BONUS: If your FICO score is OVER 679, your Debt-to-Income can be MORE than 50%!
Contact me for details.
Franangelico Ona
Loan Officer NMLS# 1078345
BIC Mortgage Company, LLC
13151 Emily Road Suite 100
Dallas, TX 75240
[email protected]
214-919-4174
Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, NMLS# 1203087
Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, Franangelico Ona LO NMLS# 1078345 or Licensed by the Department of Business Oversight under the California Finance Lenders Law, Franangelico Ona LO NMLS# 1078345
BIC Mortgage Company, LLC, 13151 Emily Road Suite 100 Dallas, TX 75240, NMLS# 1203087 , Residential Mortgage Loan Company