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Michael Kirkutis

What is a debt to income ratio and how does impact getting a mortgage?

Thursday, September 19, 2013 - Article by: Michael Kirkutis - MAK Mortgage Company, Inc. - Message

Based on the various mortgage programs, a mortgage lender will determine guidelines on what debt to income ratios are allowable for a specific mortgage program. As we work to prequalify you for a mortgage loan, we will run financing figures broken down into monthly income and debt numbers for each prospective borrower. Once you run mortgage payments, which typically includes principal & interest, taxes, homeowners insurance, mortgage insurance, and association fees, etc., the total housing payment divided by your gross monthly income computes the front debt to income ratio. Then all other monthly debt obligations such as car loans, personal loans, student loans, credit card debt, and any other required financial obligations are added together and added to the monthly housing debt for a total or back debt to income ratio. It is these front(housing) and back(housing + all other debt obligations) debt to income ratios that the mortgage lender will look at to determine capacity to pay the mortgage loan. Michael A. Kirkutis, Mortgage Loan Originator, CT DOB NMLS #111599, MAK Mortgage Company, Inc., 31 Woodland Street, Suite MMA, Hartford, CT, 06105, CT DOB NMLS #103552,, 860-724-8097.

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