@StartingOver10 wrote:
@Anonymous wrote:
@StartingOver10 wrote:
@Anonymous wrote:
I am in the very early stages of learning about applying for mortgages in hopes that I may be able to buy a home in the next couple of years. This morning I was trying to figure out my DTI. I have read on many sites and used various calculators and I keep coming up with two different answers. Some calculators have you enter your current rent or mortgage payment (in my case, current rent) and some tell you not to enter your current rent payment because it will be replaced with the new mortgage anyway. If I enter the rent that I am currently paying, along with my student loan, I am at 27.09%. If I do not enter my current rent payment, I am at 1.64%. Which one is correct?
If you are buying a home for you to move into as your residence, you do not enter your current rental payment.
However, if you currently own a home and plan to keep it to rent out after you close on your new purchase, you would enter the amount of your mortgage.
It's not tricky: the calculations are based on what you have as current debt at the time of application + the new home purchase monthly costs. Your rental would not be considered current debt because you wouldn't keep it once you buy a property.
Thank you very much for the answer! I guess that would put me at 1.64% now.
I'm not sure - because you didn't give your income. It is based on your monthly payments including your new home payment as a percentage of your monthly gross income.
You need to include: all current cc montly payments (min amount) + current installment loans including your auto payment monthly + the new house payment (principal, interest, real estate taxes, homeowners insurance, mortgage insurance if applicable and HOA if applicable
What is your current gross income (before taxes)?
What do you project your new house payment to be according to the above?
What is your current debt payments?
My monthly gross income is currently $2,240. Expecting that to rise to around $2,560 soon. This is not the only income in the home, but it is the only income that I would be listing on the mortgage application. Hopefully it will rise more by the time I am ready to buy. For the purposes of this calculation, I used what I am currently making, which is $2,240/mth.
My only debt is $3,980 on a student loan, of which the minumum payment is $36.77. It is very possible that this would be paid off before I began the morgage process.
I have no idea what the projected amount of the house payment would be, since I am not that far into the process yet. I was just trying to figure out what my current ratio is. I'll be honest here... I have no idea where to start. For the last 9 months I have just been trying to clean up my credit reports and save money. I thought I would learn a lot about the process of buying before I even try.
ETA: Obviously, based on my income, I would be purchasing something very modest. I just can't even guess a price range right now.
