Debt-to-Income Ratio: What Exactly Does It Mean?

So you’ve thought about it long and hard, and you’re finally ready to buy a home. Awesome! So now what? Well, you know enough to understand that you’re going to have to qualify for a loan, and that loan will last a long time. But what else do you need to consider? How much will you pay every month? What kind of down payment do you need? How will lenders know how much of a loan you can afford to pay back over the next 30 years? Well, one of the answers to that question lies within your Debt-to-Income ratio. Lenders will use this as one way of analyzing your capacity to pay your debts. What Is Your Debt-to-Income Ratio? So what is your Debt-to-Income Ratio? It’s calculated by taking all of you

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