Ms. Hill, I stumbled upon one of your videos the other day and have been hooked on the way you thoroughly explain home ownership. I feel embarrassed to say at almost 50, I've been Ok with renting until now. Rental prices are ridiculous, so now I'm getting my affairs in order to purchase within the next year or 2. Again, thank you for sharing your knowledge and experience. Blessings to you and your family!
Thank you so much for finding me and watching. Don't be embarrassed, great time in life to buy, you have learned so much and know what you want in life. Excited for you!!
This is so necessary for everyone to know. How lenders calculate what we can afford is so different from the reality of all our other expenses we have every month. It makes you put a mirror to yourself and hopefully get your other expenses down to the 36 to 40 range
I just wanted to let you know how much your videos are helping me. When I was growing up nobody ever schooled us on this important information. Thanks to you I am really understanding, thank you so much!! Barbara
When calculations for dti on conventional they only take in payments rather than the 1% rule like FHA? Also, what If you are still in school for a graduate degree is your student loan taken into account still in dti?
Tell me. My son makes approximately $80,000 and was hold that he pre-qualified for only $250-270. He has only one credit card with a balance of $2000 and credit rating of 780.00. Does that seem right to you that he would prequalify so low? His credit age is 7 years!
Hi Mrs. Hill! Thank you for your informative videos. I've learned so much about the home-buying process. I am a loyal subscriber and I will recommend your channel to anyone I know who is looking to buy a home.
Your channel is so helpful! It seems so simple but a lot of people don’t know this. I can’t remember this process going into my second home. So it’s very refreshing to see you break this down step-by-step for a lot of people. So thank you very much. I almost feel guilty that you give away all of this information for free.
I appreciate this video so much. I have a question, when calculating my current debt, should I include what I am currently paying for rent/utilities associated with my current residence?
This is the closest I have right now is this video - ua-cam.com/video/pNGzW-trT84/v-deo.html Most lenders will calculate 75% of the anticipated rental amount towards your income when buying an investment property. They also usually want to you to have 6 months of your current mortgage payment in reserves or the investment property's mortgage payment in reserves(saved).
YOU are simply THE BEST The Lord is pleased because what your doing is PURE MINISTRY empowering HIS people!!!! May HIS Miracles & HIS blessings continue to fall unto you & yours my sistah
Only, irs debt, child support and alimony. Other than that only debts that you borrowed money. So you do not count bills such as car insurance or utilities.
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debt to income ratio is a real thing lol. Imagine my husband and I make decent money, both credit scores in the 700s YET because of that 600 car payment they wanna loan us a crap amount talking about we looking at a 1800 mortgage....ya we rather rent in a great area for 1600 a month smh, now we are able to make the car payment lower but not gonna look to buy until 2 or 3 years from now.
Where do you live? My mortgage is 1,725 a month and I have beautiful 4 bedroom / 2 bathroom home with a little over 2,000 square feet. In DFW you can get real nice home in that price range.
Looking at gross income is so flawed in my opinion and they should be looking at your net income instead. Health care costs come out of my gross income and so does my 401k and that is about $500 plus taxes before I spend a dime.
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Yes, next Wednesday for sure. It is stopping some people from qualifying because of the high overall balance, but I will discuss some alternative options as well. Thank you for watching!
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Thanks so much for watching. If you have no debt then the lender will likey allow you to use 40-50% of you gross income to purchase a home, it depends on your credit score, loan type and lender to determine what percent of your income they will allow you to use.
This is very informative. I notice you only added the mortgage only to the debt. Do lenders also calculate the PMI, HOA fees and Insurance to the debt?
Hi Shanika, no they will not count because they are not debt, good question. The only debt they typically will count that does not show up on your credit report is IRS debt and child support. Thanks for watching. You should watch this video next, it will give you some more insight - ua-cam.com/users/livecpewL4OlpjQ?feature=share
Only instances when you have borrowed money or owe a debt and it will be on your credit report, so none of those. The exception would be child support or alimony payments.
So is there anything else included in your DTI besides, car payment, student loans, and min credit card payment? What about car insurance, current rent (if you are renting), and other expenses?
Only debt is included - so when you have borrowed money. So do not include rent, car payments, etc. The only exception I have seen to debt is usually child support payments, most lenders will include those.
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Liked. I know my comment is besides the point of this video but My wife and I are stuck between 2 worlds on so many different dilemmas when it comes to home ownership, the possibility of it even happening and whether it’s the right choice for us. We wanted to buy a house last year but our taste is alittle higher than what we could afford based on our debt so we got discouraged and stopped looking. Right now combined we make a total combined income $105K annually. Most of the houses we want in central Houston are $250+. I’m not sure how to determine what we need to make to afford this. We have No student loans or auto loans but in revolving credit (CC and LOC) we have about 18K we owe. Instead of buying a home we now pay $1500 a mo on a decent apt close to Downtown Houston. We do have plenty of wiggle room to save/ spend. Our CC debt feels impossible to whittle down. I understand lots of it has to do w/ spending habits. At this point our CCs are maxed and we’re not using those anymore but we’re only making minimum payments too. Any thoughts?
You should be able to afford a home for $250 based on your income. 25% of your take home should be about $1500 and that is usually a good budget amount for housing. If you have no debt besides the credit card debt then pay that down and begin to save for a down payment. Do a budget every month together and save. What I find is happening with some married couples is that they basically are not on the same page financially so it is hard to reach shared goals. You can do this, you have the income to pay down debt and save for a house.
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They will still count them...here is my updated student loan video by loan type ua-cam.com/video/yunqWv1xIUU/v-deo.html and most guidelines for VA at a 41% DTI but depending on the lender and your credit they may allow you to go higher than that. Also my VA video - ua-cam.com/video/8q2Jx0uFj-k/v-deo.html
Yes, they will evaluate everyone so yes, everyone should do it. You also need to see what everyones credit score is because they will use that to determine how high your DTI ratio can be. Please watch buying property with family ua-cam.com/video/ep_leUd1-Ks/v-deo.html Since this is not an investment property I don't think your son/renter will be factored in at all.
It will only be counted one time on your DTI if you are applying together. If you were applying separately then they would count it for each of you, the full minimum payment, not half. Thanks for watching.
The lender will use gross income, you can use net income when you are budgeting. Debt is just what you owe - money that you have borrowed. You do not have to include regular bills like utilities. Thanks for watching!
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What about if your balance is paid off of your credit cards but they're still open. Do they still count the minimum payment for them? Great video thankyou!
I hate to keep asking questions but I have to because I am a over planner. Lol. Do they calculate your monthly payments such as cable, gas, phone and car insurance? Are those debts counted?
No, they only count instances when you have borrowed money, so no utilities or bills like car insurance. The only exceptions would be child support/alimony and IRS debt. Its fine...I love questions...it leads to future videos😊. If there are first time buyer questions - I want videos to address those. You will likely know more than your agent when you are ready to buy...just keep watching.
@@ShaheedahHill Home get me. The idea I have with. So I want to eat my husband well I retain the first mortgage in my name. The only first issue we had was needing to fill up the whole process in order to put a down payment on a second home.
Do you include your current rent as a debt to income? I don't understand why would you include rent if you won't have that debt when you get the home ?
I'm at 12% but want to pay off my car loan then I'll be at 8% but I'm keeping my student loans open but going to pay them down less than 12K because they give me credit history
My husband is self employed. He asked to show 2 years of bank statements and 2 years of tax forms.. so the 2020 bank statement was 135,000 but the person who did his income taxes, after expenses it went down to 37000.. so im confuse how do you calculate the amount for 2 years?
Most lenders will use the net of $37,000. He will likely need to find a bank statement loan geared toward self-employed buyers, if he wants to qualify for more.
If I’m a co-signer on a car loan, will it be counted as part of my DTI if I can prove that the Primary Signer on the loan is the one who’s making the monthly payments?
Rental income requirements vary greatly from what a landlord may require, you should ask the place where you are considering renting. But budget wise try to stay 25% below your take home pay for you rent payment.
I have two charged off credit cards that I am debating on paying off should I include them as debt as well and factor then into my dti or do they hinder the credit score mostly?
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Just think, for close to 100 years (most of the 1900s) the price of a house about the same as your yearly income. A man who didn’t even graduate high school could buy a house and support a wife and several children.
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Hello! I enjoyed the video! I have a question. I’m part-time and my bf is full time so he has more consistent weekly checks. If we try to buy a house together will my inconsistent checks mess up potentially getting us approved for a house? Or will it be ok since he’s full time and has consistent checks?
They may use an average for you since your pay varies, also most lenders want 2 years of part-time employment history. The best thing to do is just reach out to local lender to see how they will evaluate your income.
Get you credit score up to qualify. Lenders are avoiding risk right now. Although your DTI is low, you credit score makes you a higher risk. Most lenders want to see scores 660 or higher right now.
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Then you only need to estimate your mortgage payment divided by your income, because the mortgage will be the only debt you will have. Right now your debt to income ratio is 0%. They will probably approve you for 43% or so percent of your gross income for a mortgage payment.
I have a car payment but it's not in my name. Do I need to add this to my DTI? Following your video and figuring mine up and adding the house I'm looking at my DTI is 26%. I feel like I did something wrong 🤣
If the car payment will show up on your credit report include it, if not leave it out for now. However, ask the lender about it because they may see the payment on your bank statements. Use the DTI calculator in the description. If you are getting the same percentage you probably calculated correctly.
When calculating dti on the back end. What's included with the percentage of the mortgage? Just mortgage payment? Taxes and Pmi? Hoa? Do I included all of this as a whole to determine dti or am I only looking at it being only the mortgage payment in this calculation?
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Not to sound like an asshole but I am currently looking into my first home. What is my debt to income ratio? I have no student loan and no outstanding debt. So zero?
Good question... you actually have 2 ratios, one before your estimated mortgage(back end ratio) and one after(front end ratio). Your back end ratio is zero. When you include your estimate mortgage divided by your debt that is your front end ratio. www.investopedia.com/terms/b/back-endratio.asp
I make 1300 a month Social security But thats because I’m physically disabled. I have a Car payment of 363.00 & A cable bill of 160.00 & I want to purchase a home for me & My son What are some tips ?
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Hi Shaheedah! I do not have any debt whatsoever and no credit. My fiancé does have credit and 14,000 debt total. Should I begin to build credit in order to purchase a new construction home?
Yes, you will likely have to have credit to apply to most traditional mortgage loans. You may be able to find a lender that does not require a credit score. If you don't want to have to borrow any money just get a pre-paid card and pay it off monthly. Hopefully he has a good credit score because if you buy a home together they will look at the lowest score when you are getting qualified. Get married, pay off your debt, save and then buy a house.
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☑️ Congrats! I did the same and paid off my car, which unfortunately caused my Fico score to decrease three points. However, 838 is still within an excellent range.
Gold! No other word to explain it. This is a huge help
Thank you!
Right!
U are a brilliant teacher and u are wonderful 👏
Literally over here crying at the fact that $200K was $1250/ month in 2020!
This is my target 🎯 payment and now it's 1800 range. ,🤦🏿♂️
This is the best explanation of DTI I've ever seen on UA-cam! Thanks
Thank you that made my day😀
2nd that
I agree. Thank you!
Ms. Hill, I stumbled upon one of your videos the other day and have been hooked on the way you thoroughly explain home ownership. I feel embarrassed to say at almost 50, I've been Ok with renting until now. Rental prices are ridiculous, so now I'm getting my affairs in order to purchase within the next year or 2. Again, thank you for sharing your knowledge and experience. Blessings to you and your family!
Thank you so much for finding me and watching. Don't be embarrassed, great time in life to buy, you have learned so much and know what you want in life. Excited for you!!
This is so necessary for everyone to know. How lenders calculate what we can afford is so different from the reality of all our other expenses we have every month. It makes you put a mirror to yourself and hopefully get your other expenses down to the 36 to 40 range
Thanks for watching!
I just wanted to let you know how much your videos are helping me. When I was growing up nobody ever schooled us on this important information. Thanks to you I am really understanding, thank you so much!! Barbara
I'm so glad you found me, thank you for watching!
www.bankrate.com/calculators/mortgages/ratio-debt-calculator.aspx
When calculations for dti on conventional they only take in payments rather than the 1% rule like FHA? Also, what If you are still in school for a graduate degree is your student loan taken into account still in dti?
Why not use 52 weeks, instead of dividing by 12
Tell me. My son makes approximately $80,000 and was hold that he pre-qualified for only $250-270. He has only one credit card with a balance of $2000 and credit rating of 780.00. Does that seem right to you that he would prequalify so low? His credit age is 7 years!
Now when you say debt does that include my usual utilities payment and rental payment?
Hello I live in pa and we planing on buying in nj do we have to apply for the loan in pa or nj thanks in advance
Thank you for supplying so much valuable information FREE!!! This video was a gold mine for me!
Thanks for the feedback Bridget!
Hi Mrs. Hill! Thank you for your informative videos. I've learned so much about the home-buying process. I am a loyal subscriber and I will recommend your channel to anyone I know who is looking to buy a home.
Thank you so much, I really appreciate that.
Thank You! The on-line calculator was easy to use.
Glad it helped!
I just wanted a simple explanation of DTI and thank you!!! This was perfect and understandable!
Glad it was helpful!
A very nice detailed explanation. Helpful!
Thanks for watching!
Also I am on a income driven student loan repayment plan and thankfully that’s my only debt! But now that 1% might hinder me 😳
👏 Amazing, thanks for sharing. So explicit
My pleasure, thank you for watching.
I am currently assigned a MC for Naca and we are yet to meet. This infor will certainly help.
Your channel is so helpful! It seems so simple but a lot of people don’t know this. I can’t remember this process going into my second home. So it’s very refreshing to see you break this down step-by-step for a lot of people. So thank you very much. I almost feel guilty that you give away all of this information for free.
You're so welcome, thanks for watching....again😊
I appreciate this video so much. I have a question, when calculating my current debt, should I include what I am currently paying for rent/utilities associated with my current residence?
No utilities, no rent. Just include your anticipated mortgage payment instead. Thanks for watching!
Can you do another video like this for an investment property after purchasing 1st home?
This is the closest I have right now is this video - ua-cam.com/video/pNGzW-trT84/v-deo.html
Most lenders will calculate 75% of the anticipated rental amount towards your income when buying an investment property. They also usually want to you to have 6 months of your current mortgage payment in reserves or the investment property's mortgage payment in reserves(saved).
Really appreciate this video!! Learned ALOT and it made me feel that much more confident in my journey of buying my first home.
Thank you and best of luck!
This information is so informative!!! Your videos are so helpful !!!
YOU are simply THE BEST
The Lord is pleased because what your doing is PURE MINISTRY empowering HIS people!!!!
May HIS Miracles & HIS blessings continue to fall unto you & yours my sistah
Amen and thank you for the blessing and kind words!
Thank you for this.. what else is considered as debt.. is car insurance?
Only, irs debt, child support and alimony. Other than that only debts that you borrowed money. So you do not count bills such as car insurance or utilities.
Thanks so much for making it THIS crystal clear. Been wanting to buy a long time but I can’t seem to get anyone to explain this to me beforehand.
Thanks for watching and for the feedback😊
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debt to income ratio is a real thing lol. Imagine my husband and I make decent money, both credit scores in the 700s YET because of that 600 car payment they wanna loan us a crap amount talking about we looking at a 1800 mortgage....ya we rather rent in a great area for 1600 a month smh, now we are able to make the car payment lower but not gonna look to buy until 2 or 3 years from now.
Yes, a lot of people are denied or cannot qualify for the kind of house they want because of car loans or student loans.
Where do you live? My mortgage is 1,725 a month and I have beautiful 4 bedroom / 2 bathroom home with a little over 2,000 square feet. In DFW you can get real nice home in that price range.
Sell your car and by a cheaper one. $600.00 car payments are ridiculous
Looking at gross income is so flawed in my opinion and they should be looking at your net income instead. Health care costs come out of my gross income and so does my 401k and that is about $500 plus taxes before I spend a dime.
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Really really really great channel 👏
Thank you
@@ShaheedahHill do you have an email where I can send you a question that I have??
@@princekiki33 put it in my First Time Buyers FB group facebook.com/groups/HillsFirstTimeBuyers
Awesome!!! Thank you 😊
You are so welcome!
Wow, this video is incredibly helpful. I am a student graduating soon and this is exactly the information I needed to know!
Glad it was helpful! Congratulations on your graduation!
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Ready for student loan payment video 💚
Yes, next Wednesday for sure. It is stopping some people from qualifying because of the high overall balance, but I will discuss some alternative options as well. Thank you for watching!
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Thank you so much!
Great video beautifuly explained . What if someone had no payments or loans or credit card what will be debt to income ratio look like ?
Thanks so much for watching. If you have no debt then the lender will likey allow you to use 40-50% of you gross income to purchase a home, it depends on your credit score, loan type and lender to determine what percent of your income they will allow you to use.
EXCELLENT!
Thank you!
THANK YOU SO MUCH MUCH NEEDED INFO!
Finally makes sense. Thank you!!!
Great, so happy this helped!
Very helpful
Thanks for watching!
Great video. You cover all the other similar videos I have seen. In addition you gave information about Student loans that I was unaware of.
Thanks!
OMG! Excellent information! I love this channel!
Thank you!
This is very informative. I notice you only added the mortgage only to the debt. Do lenders also calculate the PMI, HOA fees and Insurance to the debt?
Anytime I am talking about a mortgage in any of my videos I am talking about the full payment. Taxes, Insurance PMI and HOA ...
Thank you for this explanation! Your videos are clear and concise and so very valuable in terms of the information that you provide. Thank you!
Wow... Is this really true? My credit debt is barely 200 with 6k monthly... I am baffled that this is possible for me.
Yes, very true😊
How about other bills like your rental payments and phone bills etc do they factor any of that stuff in? Genuinely asking
Hi Shanika, no they will not count because they are not debt, good question. The only debt they typically will count that does not show up on your credit report is IRS debt and child support. Thanks for watching. You should watch this video next, it will give you some more insight - ua-cam.com/users/livecpewL4OlpjQ?feature=share
What is considered debt payments? Would car insurance, phone and supplemental life insurance be part of this? Is i
Only instances when you have borrowed money or owe a debt and it will be on your credit report, so none of those. The exception would be child support or alimony payments.
Easiest breakdown on UA-cam.
Thanks, I appreciate that🙂
So is there anything else included in your DTI besides, car payment, student loans, and min credit card payment? What about car insurance, current rent (if you are renting), and other expenses?
Only debt is included - so when you have borrowed money. So do not include rent, car payments, etc. The only exception I have seen to debt is usually child support payments, most lenders will include those.
@@ShaheedahHill thank you!!
This was very informative. Thank you!
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Thank you for explaining this so well!
Glad it was helpful!
Liked. I know my comment is besides the point of this video but My wife and I are stuck between 2 worlds on so many different dilemmas when it comes to home ownership, the possibility of it even happening and whether it’s the right choice for us. We wanted to buy a house last year but our taste is alittle higher than what we could afford based on our debt so we got discouraged and stopped looking. Right now combined we make a total combined income $105K annually. Most of the houses we want in central Houston are $250+. I’m not sure how to determine what we need to make to afford this. We have No student loans or auto loans but in revolving credit (CC and LOC) we have about 18K we owe. Instead of buying a home we now pay $1500 a mo on a decent apt close to Downtown Houston. We do have plenty of wiggle room to save/ spend. Our CC debt feels impossible to whittle down. I understand lots of it has to do w/ spending habits. At this point our CCs are maxed and we’re not using those anymore but we’re only making minimum payments too. Any thoughts?
You should be able to afford a home for $250 based on your income. 25% of your take home should be about $1500 and that is usually a good budget amount for housing. If you have no debt besides the credit card debt then pay that down and begin to save for a down payment. Do a budget every month together and save. What I find is happening with some married couples is that they basically are not on the same page financially so it is hard to reach shared goals. You can do this, you have the income to pay down debt and save for a house.
Contact hacklord on stefangriffin500@gmail.com, text me on Whatsapp +17178276321 , he's good and expert in a credit score fix, credit card hack and bank hack , ask him more details about loan,pays loans,paypal and western union included..
What if you got a new job that pays more than your last job since filing taxes! What do they base it off of?
They will use your current pay stubs for income.
What if the student loans are in deferment? Also does the VA has a certain amount of DTI that they allow? TIA
They will still count them...here is my updated student loan video by loan type ua-cam.com/video/yunqWv1xIUU/v-deo.html and most guidelines for VA at a 41% DTI but depending on the lender and your credit they may allow you to go higher than that. Also my VA video - ua-cam.com/video/8q2Jx0uFj-k/v-deo.html
@@ShaheedahHill I did check the videos out and a lot of great information! Definitely answered all my questions. Thank again ma’am !
So, I am looking to add my mother and daughter, so do we do all of the same steps? Also, I want to add my son as a renter, how does that work?
Yes, they will evaluate everyone so yes, everyone should do it. You also need to see what everyones credit score is because they will use that to determine how high your DTI ratio can be. Please watch buying property with family ua-cam.com/video/ep_leUd1-Ks/v-deo.html
Since this is not an investment property I don't think your son/renter will be factored in at all.
Question. So my husband and I are on the same credit cards with the same monthly minimum, does it count as one or doubled?
It will only be counted one time on your DTI if you are applying together. If you were applying separately then they would count it for each of you, the full minimum payment, not half. Thanks for watching.
Great info. Why not use income after taxes?
Is debt and expenses used interchangeably? Should I add phone, cable, utilities?
The lender will use gross income, you can use net income when you are budgeting. Debt is just what you owe - money that you have borrowed. You do not have to include regular bills like utilities. Thanks for watching!
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Thanx ....
You're welcome!
This was great I'm so happy I'm at 10% woohoo... cant wait to get to GA
Question you don’t add your current rent
No lenders will not include your current rent since it is not debt. Thanks for watching!
Thank you!!! Sooooo much for this video!!!!!
Thanks for watching 🙂
Great information!
Glad it was helpful!
If you are a co-signer on an auto loan and the primary person makes the payments, do you have to calculate that into your debt?
If it shows up on your credit then it will likely be included in your DTI.
Thank you, very helpful
Thanks for watching!
What about if your balance is paid off of your credit cards but they're still open. Do they still count the minimum payment for them? Great video thankyou!
No, if there is no balance at the time of application it will not get factored in.
Hi Ms Hill great video great content. My question is should the monthly lease payment on a vehicle be included in calculating DTI?
Thanks 🙏🏻
Yes, that would be considered debt. They may not count it if you only have a few more payments, depends on lender and loans type.
Great video!
Glad you enjoyed it
PRICELESS TKS
Thanks for watching!
Do utilities count as debt??
No
I hate to keep asking questions but I have to because I am a over planner. Lol. Do they calculate your monthly payments such as cable, gas, phone and car insurance? Are those debts counted?
No, they only count instances when you have borrowed money, so no utilities or bills like car insurance. The only exceptions would be child support/alimony and IRS debt. Its fine...I love questions...it leads to future videos😊. If there are first time buyer questions - I want videos to address those. You will likely know more than your agent when you are ready to buy...just keep watching.
@@ShaheedahHill Home get me. The idea I have with. So I want to eat my husband well I retain the first mortgage in my name. The only first issue we had was needing to fill up the whole process in order to put a down payment on a second home.
You r awesome
Thank you for watching!
Do you include your current rent as a debt to income? I don't understand why would you include rent if you won't have that debt when you get the home ?
No don't include your rent, but you can include your future mortgage payment to see what you are likely to be able to afford. Thanks for watching.
I'm at 12% but want to pay off my car loan then I'll be at 8% but I'm keeping my student loans open but going to pay them down less than 12K because they give me credit history
do lenders calculate overtimes into your monthly income
Yes but it needs to be consistent
My husband is self employed. He asked to show 2 years of bank statements and 2 years of tax forms.. so the 2020 bank statement was 135,000 but the person who did his income taxes, after expenses it went down to 37000.. so im confuse how do you calculate the amount for 2 years?
Most lenders will use the net of $37,000. He will likely need to find a bank statement loan geared toward self-employed buyers, if he wants to qualify for more.
If I’m a co-signer on a car loan, will it be counted as part of my DTI if I can prove that the Primary Signer on the loan is the one who’s making the monthly payments?
It depends, in my experience they still count it toward your DTI. However, ask a local lender how they will calculate it.
@@ShaheedahHill Thanks.
How can I calculate it if I am trying to see if I can afford an increase in my rent? Would I still use this method in a way?
Rental income requirements vary greatly from what a landlord may require, you should ask the place where you are considering renting. But budget wise try to stay 25% below your take home pay for you rent payment.
Should I add my minimum Personnel Loan payments into my DTI calculations
Yes, especially if it shows up on your credit report.
So do you include rent, internet, utilities? Or just actual debt on monies borrowed?
Amounts borrowed.
Thanks! My wife and i just started new job paying much more. How many months of paystubs will we need to show, the minimum?
@@edwardteague5678 Usually 30 days
I love it.
Why is it I understand what she says soon I am done with my purchased?
Average Joe says as long I have a job I will buy a house. 😂
Thanks for watching!
I have two charged off credit cards that I am debating on paying off should I include them as debt as well and factor then into my dti or do they hinder the credit score mostly?
Most impact to your credit score, even if you pay off the damage may already be done. Only pay if required to qualify for mortgage.
What if you haven’t used your cards but they are active ZERO balance I have about 10 active credit cards would I include them in my DTI
No don't include credit card payments with a zero balance.
What about bills?
Only instances in which you have borrowed money count towards you debt to income ratio. So utility, cell phone bill, etc. do not count.
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If you have a 2nd job. How long do I need to keep the 2nd job before it can be included in my Income for DTI Ratio?
Just think, for close to 100 years (most of the 1900s) the price of a house about the same as your yearly income. A man who didn’t even graduate high school could buy a house and support a wife and several children.
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You rock!!!
Thank you!
Why do they look at income before taxes since that is not the actually your disposable income.?
Because they want you to qualify for more, they make more money on interest and some borrowers want to qualify for more as well.
Hello! I enjoyed the video! I have a question. I’m part-time and my bf is full time so he has more consistent weekly checks. If we try to buy a house together will my inconsistent checks mess up potentially getting us approved for a house? Or will it be ok since he’s full time and has consistent checks?
They may use an average for you since your pay varies, also most lenders want 2 years of part-time employment history. The best thing to do is just reach out to local lender to see how they will evaluate your income.
Question what if I'm 15% fit or lower but credit is under 600
Get you credit score up to qualify. Lenders are avoiding risk right now. Although your DTI is low, you credit score makes you a higher risk. Most lenders want to see scores 660 or higher right now.
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What if you don’t have no debt
Then you only need to estimate your mortgage payment divided by your income, because the mortgage will be the only debt you will have. Right now your debt to income ratio is 0%. They will probably approve you for 43% or so percent of your gross income for a mortgage payment.
I have a car payment but it's not in my name. Do I need to add this to my DTI? Following your video and figuring mine up and adding the house I'm looking at my DTI is 26%. I feel like I did something wrong 🤣
If the car payment will show up on your credit report include it, if not leave it out for now. However, ask the lender about it because they may see the payment on your bank statements. Use the DTI calculator in the description. If you are getting the same percentage you probably calculated correctly.
When calculating dti on the back end. What's included with the percentage of the mortgage? Just mortgage payment? Taxes and Pmi? Hoa? Do I included all of this as a whole to determine dti or am I only looking at it being only the mortgage payment in this calculation?
The back end ratio will include your entire mortgage payment, principal - Interest - taxes - insurance -PMI(if applicable) and HOA(if applicable).
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What about food gas ?
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I thought DTI is calculated by the net income, not gross, pleaase correct me if I'm wrong
Lenders use gross income.
@@ShaheedahHill thank you for the reply
Not to sound like an asshole but I am currently looking into my first home. What is my debt to income ratio? I have no student loan and no outstanding debt. So zero?
Good question... you actually have 2 ratios, one before your estimated mortgage(back end ratio) and one after(front end ratio). Your back end ratio is zero. When you include your estimate mortgage divided by your debt that is your front end ratio. www.investopedia.com/terms/b/back-endratio.asp
I make 1300 a month Social security But thats because I’m physically disabled. I have a Car payment of 363.00 & A cable bill of 160.00 & I want to purchase a home for me & My son What are some tips ?
Do you still have to add your credit card payments to the DTI if you have a $0.00 balance on the credit card?
No only minimum payments, if there is no payment due then it is not included. Thanks for watching!
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Hi Shaheedah! I do not have any debt whatsoever and no credit. My fiancé does have credit and 14,000 debt total. Should I begin to build credit in order to purchase a new construction home?
Yes, you will likely have to have credit to apply to most traditional mortgage loans. You may be able to find a lender that does not require a credit score. If you don't want to have to borrow any money just get a pre-paid card and pay it off monthly. Hopefully he has a good credit score because if you buy a home together they will look at the lowest score when you are getting qualified. Get married, pay off your debt, save and then buy a house.
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NO.
Next question.
🙂
I have an income of $2500 a month only debt is $400 car payment 🥺but my credit is like 580😭
Will a loan be counted as part of my DTI if I only have 10 payments left to pay it off?
For car payments usually not, but check with the lender for any other types of debt.
If my dti is like 15%, that's good? :)
Do you include utilities in your DTI
No, they are not included.
If you have 0$ balance on your credit cards, would you still add the minimum payment for those cards?
No because no payment is required.
This is a good example of why the last 6 months I have been paying off all my debt.. shit is working.. Only my car note left!
Keep going kk
Congrats bro keep it up
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☑️ Congrats! I did the same and paid off my car, which unfortunately caused my Fico score to decrease three points. However, 838 is still within an excellent range.
This statement is my current MOOD.
This was a great help. Thank you👍😀
Great Video!
Thanks!