Quick Mortgage Tips For A Tuesday

Quick Mortgage Tips For A Tuesday

What you need to consider before you buy

Mortgage tip: Always remember it takes $2 of income to offset every $1 of debt for a 2:1 ratio for mortgage qualifying purposes.

If you want that fancy Tesla at an $800 per month, then you’ll need $19,200 a year in extra income or you’ll need to cut a current debt payment of $800 to balance your debt-to-income ratio.

If you want the dream house at $3,500 month, then aim your debt-to-income ratio at 36%—meaning  you would ideally want income at $117,000 a year without carrying other consumer obligations in order to afford this mortgage.

Exceptions to the debt-to-income ratio rule?

There are however, a few justifiable exceptions that make exceeding this 36% debt allowance reasonable. These include the following.

  • You know your household income is poised to go up in the near future

  • You will be able to cut another expense in the short term, such as paying off in full or refinancing another obligation.

  • Your mortgage payment will drop (perhaps via refinancing) in the near future.

  • You are coming into cash soon, with which you plan to make smart choices.


When you are thinking about buying a home or refinancing a home you already own, today’s borrowing choices should be based upon what the future holds, not just what’s right here in the now. By focusing on what the future holds and keeping your income as high as possible in relationship to your liabilities, you will position yourself to have an easier time qualifying for a mortgage and giving yourself for a brighter future financially.

This article was written by Scott Sheldon and originally published on Credit.com.

Jacquelyn Carlson Headshot
Phone: 763-442-7197
Dated: December 15th 2015
Views: 184
About Jacquelyn: I am in my first year as a buyer specialist with the Steinbach Home Selling Team. I work exclusiv...

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