DTI

[HighGoals]

If my income is $78K how much debt can I have?

I also think I need another credit card since I only have one with a small limit. I know I cannot get an unsecured right now so what should I do now in order to prepare for a mortgage loan in the future?

[Anonymous]

If your credit is not good then you can take new credit card but maintaining a credit score is not easy. Credit score depends on five factors: Payment history - 35%, Credit utilization - 30%, Credit age - 15%, Credit mix - 10%, New inquiries for credit - 10%

Tips to Improve Your Credit Score - Here are five reliable ways to raise credit score fast when you want to buy a home.

• Pay all bills on time
• Keep credit card balances low
• Check your credit reports
• Keep credit cards open
• Look at your credit mix
• If any fraud done, inform immediately
• Don’t co-sign loans if not necessary

If you want to take a mortgage loan in future then you need to do:

• Maintain a good credit score
• Employment history and income proof
• Tax returns for the previous two year
• Property value
• Bank statements

Also contact to your nearest local loan officer to discuss about mortgage requirements and type.

[Anonymous]

There is so much more that goes into a mortgage then debt to income. The first thing you should do is figure out what you have for a down payment. Then do you want to FHA or conventional loan. FHA and a few conventional allow for a minimum of 3.5% down. FHA also has lenient debt to income guidelines.

[Anonymous]

If the plan for a mortgage is gonna be a year or two out or longer,

then applying for 1 or more credit cards is ok,

but if it will be less than a year, might want to hold off or ask more questions on that topic.

DTI is gonna rely on what type of mortage you will apply for.

[HighGoals]

It will probably be FHA because we won’t have 20% to put down.

[CreditInspired]

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@HighGoals wrote:
If my income is $78K how much debt can I have?

I also think I need another credit card since I only have one with a small limit. I know I cannot get an unsecured right now so what should I do now in order to prepare for a mortgage loan in the future?

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I'm providing a link so you can understand how DTI works. 

https://fitsmallbusiness.com/debt-to-income-ratio/

So based on your monthly gross ($6.5K), your total monthly expenses should not exceed 36%, which is $2,340. However, based on other factors in one's credit profile, some mortgage lenders will go as high as 50%. But IMHO that is really not a place someone should be if they have a mortgage. Too many financial unknowns as a homeowner can and do occur.

From the article: It’s not uncommon to follow the 28/36 rule. This rule states that a person or family should spend no more than 28% of its gross monthly income on total household expenses and no more than 36% on total debt payments, leaving at least 36% for things like taxes, discretionary spending, and savings.