DTI Calculation - Education needed

[techgirl]

How do you figure DTI ratio? Just trying to understand where we stand.... We did how much  can you buy and it said smething wacky like $450,000 conservative.... $250,000 is conservative  and as much as I want to spend....

Income 15,000/mo

SLs: 1,000/mo

CC: 400/mo

Car Loan: 1000/mo

What's the formula and  still  trying to understand front end and  back end...

[Booner72]

I know one this is that front end doesn't really matter as far as my LO and mortgage company are concerned - it's back end that really counts- and it's the sum of your new mortgage + taxes +PMI +Hazard insurance + SL +any other monthly debt like credit cards, divided by something to get your percent.  They don't count utility bills, etc.

Boy that helps!   Weekends are slow here so someone will answer you more fully soon.

[Booner72]

There are caculators here and on the internet you can use.

[techgirl]

Thanks. I  haven't found a DTI income calculator -but, yeah, I'll look at google. but I am not sure what the mortgage  would  look like. We are planning on a $225,000 so I am kinda using that as a starting  point. Just not sure if  in 9 months we will  get the same type of house for that price...

[Booner72]

It's slow on the forum on weekends - u might have to wait, like I said, for all of your questions to be answered on Monday.

[techgirl]

You are right,  it is slow. I don't have any time during the week. I guess I will log in at night after work.... Thanks for being there today Looking for calculators and all I can  find here is  how much can you buy - and in my opinion the calculator even for conservative is agressive.... I guess now that I am  older, I don't want to spend ALL my money in a frickin' house. Been there, done that, got burned. I want something nice that I can own outright and travel or just live  comfortable  during  retirement.

[techgirl]

Okay I googled it and found a dti calculator.

It says: 36% or less is the healthiest debt load for the majority of people. Avoid incurring more debt to maintain a good ratio. Ours is 16%, so even though I feel like I have lots of debt, the ratio is healthy....I also didn't put in a mortgage payment.

But this doesn't match all of the other posts that I have seen on this board.

[Booner72]

Did you put in the DTI calculator your proposed mortgage payment and all of that?  (Cuz u say you didn't put in rent....??)

Yep, I've read front end/back end all day long.  But when I sat down w/ my LO I asked her about it specfically and said they don't look at that.  Maybe I just have a weirdo lender or something.  FHA loan.

[Booner72]

I just googled "front end back end mortgage" -  about.com has a really good article that explains it.

[Anonymous]

To calculate your DTI you add up all of your monthly debts (back end would be including the new mortgage payment) and divide the debts by your monthly income. Atleast I think that is how my LO explained it.