what kind of debt to ratio do lenders look at when considering you for mortgage? any help is appreciated! THANKS!! Flagirl
some lenders will go as high as 65-70% most prefer under 50% top notch under 40% depends on you lender and your scores. i had a 624 with no money down my debt ratio with my house is just over 50% Kev
Lenders look at the front end ratios, which is your monthly mortgage payment divided by your gross monthly income and they also look at back end ratios which are mortgage payment and all your credit card bills and any installment loans ( if under 10 months letf to pay on installment these do not count) and take that total and divide by gross monthly income. FHA usually likes to see front ends around 25% and they go as high as 48% for back ends, but some go higher. I don't personally think your back ends should be as high as some lenders will let you go b/c this is really cutting it close. And remember back end ratios DO NOT include, utilities, health insurance and every day expenses, and they only use your mininum payments on debts.
