How to Qualify for a Mortgage - Part 2: Income & Debt Ratios
Posted by Roman Bodnarchuk on Fri, Feb 03, 2012 @ 08:36 AM
Part Two: INCOME & DEBT RATIOS
Yesterday, we discussed the importance of good standing credit when qualifying for a mortgage. If you missed Part 1: Credit click here. Today, there are two different sections within Part Two, Employment Income and Income to Debt Ratios.
Employment Income:
A person must have a steady and reliable income. Employment and “pension” type income is fine. The basic rule is that current employment must be a minimum of 1 year (but can be less if a person remains in the same occupation and has passed the employment probation period with current employment.) Pension is a little different. It is an approved source of income, if it is considered permanent.
Income to Debt Ratio:
Based on employment income, the amount a person can qualify for depends on income verses current debt, plus what the new mortgage, property taxes and heating will cost. Ratios must be within a certain balance in order to qualify.
Part Three we will go over Net Worth.
