Hey there, future homeowners! Today, we're diving into the crucial topic of Debt to Income Ratio. Don't worry; it's not as intimidating as it sounds! 🤓 This is one of the key factors we consider when helping you qualify for your dream home in beautiful Colorado Springs.
🔍 What is Debt to Income Ratio?
Simply put, it's a financial ratio that helps us determine if you're financially ready for a home loan. We calculate it by dividing your gross income (the money you make before taxes and deductions) by your debts listed on your credit report. This ratio ensures you have enough income to comfortably repay your loan over time.
🏡 Front-End vs. Back-End Ratio:
There are two parts to this ratio: the front-end and the back-end. The front-end ratio focuses on your new housing costs compared to your income, while the back-end ratio considers housing costs plus other credit payments, like credit cards and car loans. We typically pay more attention to the back-end ratio.
💡 Ideal Range:
There's no one-size-fits-all ratio, but aiming for a range between 40% to 43% is generally a great target. However, keep in mind that loan types like VA and FHA Loans offer more flexibility and can sometimes go above 50%, depending on your unique financial situation.
🏦 Contact Us for Expert Guidance:
Ready to explore your home buying journey? Connect with 719 Lending today! Visit our website, apply for a home loan, or reach out to our team. We're here to guide you every step of the way. 📞
🔗 Key Links:
🌐 Learn more about us at 719 Lending
💰 Need a home loan? Apply here: [Loan Application Link]
❓ Have questions? Contact us: [Contact Us Link]
📍 Visit us at:
719 Lending Inc.
104 S Cascade Ave, Ste. 201,
Colorado Springs, CO 80903
⚠️ Disclaimer: This blog/video is for informational purposes only. The content is not guaranteed or endorsed by 719 Lending, Inc., nor is it an offer of credit. The information may not be applicable in all situations. Consult your mortgage advisor before acting on this information. Equal Housing Opportunity. Company NMLS: 1601989
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