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melissa10

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I have never heard of a debt to ratio for home loan when everything is payed time?
Why can I not get a home loan?

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Debt to Income Ratio

Do you have any car payments? Are you paying off any credit cards? Do you have any other loans? And, how much do you make per month in income?

These all factor into your mortgage qualification. By law now, banks cannot lend you money for a home if you have too much debt. It doesn't matter if you have never missed a payment.

If you add up all your monthly payments (credit cards, auto loans, and/or other loans) and divide that by your monthly income, you will get the percentage of your debt to income. Normally you get disqualified automatically if that ends up being 30 - 40% or more. You don't want to have more than around 25% of debt to income per month because when you add a monthly mortgage payment, that ratio goes up right away. By law, when the banks add in a monthly mortgage payment to your debt to income ratio and that new percentage goes above 55%, you cannot get qualified.

You may need to pay down or pay off some things first.

I hope this helps :)

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