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Q: What Is a Debt-to-Income Ratio?

Your debt-to-income ratio is an important factor in getting approved for a mortgage.

Today J.C. Diaz from Movement Mortgage joined us to discuss debt-to-income ratios—one of the most important factors in getting pre-approved for a mortgage. This ratio is simply a calculation that determines how much people can afford by examining how much debt a person has compared to their total income. Your ratio is calculated on a gross basis, meaning that everything that would show up on your credit report is factored into it. Using this information, your lender can estimate how much of a monthly payment you could afford given how much you qualify for. To learn more about how debt-to-income ratios are used in mortgage approval, watch the short video above.

If you have any questions about today’s topic, don’t hesitate to reach out to us. We’d love to hear from you.

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