Income and Assets | What You Need to Know

Can I Use All of My Income?

There are very specific guidelines that must be followed in determining what income is allowable in qualifying for a home loan. For example there are a few situations that prevent you from utilizing your income.

The first is if you have been self-employed for less than two years. Generally speaking you must be able to document that your business has been established for at least two years and have ...

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Debt to Income Ratios

There are two ratios that a lender will be interested in; 1) your housing ratio, also known as your “front end ratio,” and 2) your debt-to-income ratio, also known as your “back end ratio.”

The housing ratio is your gross monthly income (your income before taxes are deducted) divided by your total housing payment. Your total housing payment includes principal, interest, taxes and insurance.

Your debt-to-income ratio is calculated the same as the housing ratio, except all revolving and installment debt is ...

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