Quick Lesson in Ratios for Home Buyers

Posted At : September 4, 2008 12:19 PM | Posted By : Sloane Realty team
Related Categories: Holden Beach and Ocean Isle Beach

These are the ratios that banks and mortgage lenders are concerned with when lending the money to sell a home. When you're looking for Ocean Isle Beach Real Estate be sure to do your home work. Sloane Realty is here to assist you in your endeavor to purchase Ocean Isle Beach Real Estate.

(article excerpt http://www.bankrate.com/clv/green/mtg/basics1-2a.asp?caret=3)

Front-end Ratio

Back-end Ratio

The total debt-to-income, or back-end ratio, shows how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees. In general, your total monthly debt obligation should not exceed 36 percent of your gross income. To calculate your debt-to-income ratio, multiply your annual salary by 0.36, then divide by 12 (months). The answer is your maximum allowable debt-to-income ratio.