With the recent mortgage and credit crisis I wanted to let everyone know what can help you improve the chances of getting approved for your major loans such as a student loan, personal loan, mortgage loan, or auto loan.
The lender looks at what is called "debt to ratio income". In other words the amount of income that you have coming in compared to the amount going out to pay bills.
HERE IS WHAT YOU DO:
Gross paycheck amount $ 2,000.00 X 40%= $ 800.00
Out of the $ 800.00 subtract the following:
Rent ot mortgage
cell phone bill
food
car payments
car fuel
car insurance
any loans-student, personal, auto, mortgage
any credit card accounts
anyone that you owe money
cable or satellite bill
all utilities
Let's say after adding all your bills up they total $ 550.00 per month. Take the $ 800.00 and subtract $ 550.00 which gives you $ 250.00 left over. The $ 250.00 is what your monthly payment can by up to. So for example if you want a car loan and the monthly payment is $ 300.00 then you will have to put down a higher payment to offset the $ 50.00 because you only have $ 250.00 that you can go up to for the maximum monthly payment that will be allowed by the lender.
STUDENT LOANS-EVEN THOUGH THEY MAY HAVE A DEFERRED PAYMENT IT IS STILL PART OF YOUR DEBT TO INCOME RATIO. SO YOU WILL NEED TO START PAYING ON THEM RIGHT AWAY. IN OTHERS WORDS YOUR DEBT TO INCOME RATIO WILL BE HIGHER. SO EVEN THOUGH THEY MAYBE DEFERRED A FAR AS PAYMENTS GO FOR THE NEXT 5 YEARS OR UNTIL YOU START WORKING, THAT IS NO LONGER THE CASE. THE BOTTOM LINE IS THAT YOU ARE IN DEBT.
STATED INCOME IS NO LONGER ALLOWED.
AUTHORIZED USER ACCOUNTS ARE NOT TAKEN INTO CONSIDERATION BECAUSE THE AUTHORIZED USER DOES NOT DEMONSTRATE THE FINANCIAL RESPONSIBILITY TO PAY ON THE ACCOUNT.
MONEY THAT PARENTS OR [PEOPLE GIVE YOU MEANS NOTHING ABOUT BACKING UP YOUR INCOME. YOU NEED PAYCHECK STUBS AND TAX RETURNS.