How do I calculate my debt-to-income ratio for mortgage approval in Alaska?

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by kory , in category: Real Estate , 8 months ago

How do I calculate my debt-to-income ratio for mortgage approval in Alaska?

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1 answer

Member

by lucius , 6 months ago

@kory 

To calculate your debt-to-income ratio (DTI) for mortgage approval in Alaska, follow these steps:

  1. Determine your monthly debt payments: Add up all your monthly debt obligations, including credit card payments, car loans, personal loans, student loans, and any other debts you have.
  2. Calculate your gross monthly income: Add up all your sources of income before taxes, such as salary, overtime pay, bonuses, commissions, rental income, and any other consistent sources of income.
  3. Divide your total monthly debt payments by your gross monthly income. Example: If your monthly debts amount to $1,000 and your gross monthly income is $4,000, divide $1,000 by $4,000 (1,000 ÷ 4,000 = 0.25).
  4. Multiply the result by 100 to get your DTI ratio as a percentage. Using the example above, multiply 0.25 by 100 (0.25 x 100 = 25%). Your debt-to-income ratio is 25%.
  5. Check the acceptable DTI ratio: Lenders usually have specific requirements for debt-to-income ratios. A lower DTI ratio is generally more favorable, as it indicates a lower risk for the lender. The acceptable DTI ratio can vary, but a common guideline is to keep your DTI below 43% for most loans.


It's important to note that different lenders may have slightly different criteria for mortgage approval. Therefore, it's recommended to consult with a mortgage lender or professional in Alaska who can provide specific guidance based on your financial circumstances.