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NoSoup · 05-26-2003, 02:42 PM

Popo:

I can't answer your question universally, but from my experience you shouldn't have a problem. Generally, most lending institutions base the loan decision off of the person's debt to income ratio. (Total Monthy Payments divided by Total Monthly Income)

It basically depends on your payments. If you are making approximately $150,000 a year, you will be making approximately $9,375 net per month. Most instituion like to see the debt to income ratio below 50%, so as long as your payments (including whatever you are applying for) are less than $4,687.00 per month, you should be fine.

The above rule generally applies, but for people that make an exceptional amount of income, it is usually ok for the debt to income ration to be higher. The reasoning behind this is because it will be much easier for you to afford another $250.00 payment, even if your debt to income ratio is already at 60%, than someone who makes $1,000 net per month to make that extra payment.

FYI: Generally, any debts reporting to your credit bureau are considerded "debt" when calculating your debt to income ratio. Also, Rent/Mortage Payment is also included. If you have a mortgage, but your payments don't include escrow tax, the tax will usually also be included in the calculation. Insurance payments, utilities, and other day to day expenses are not, which is why it is important to leave enough for the person to live on. (Hence the 50%)

If you need anything else, just ask!

Thanks for posting

05-26-2003, 02:42 PM	#15 (permalink)
NoSoup Non-Rookie Location: Green Bay, WI	Popo: I can't answer your question universally, but from my experience you shouldn't have a problem. Generally, most lending institutions base the loan decision off of the person's debt to income ratio. (Total Monthy Payments divided by Total Monthly Income) It basically depends on your payments. If you are making approximately $150,000 a year, you will be making approximately $9,375 net per month. Most instituion like to see the debt to income ratio below 50%, so as long as your payments (including whatever you are applying for) are less than $4,687.00 per month, you should be fine. The above rule generally applies, but for people that make an exceptional amount of income, it is usually ok for the debt to income ration to be higher. The reasoning behind this is because it will be much easier for you to afford another $250.00 payment, even if your debt to income ratio is already at 60%, than someone who makes $1,000 net per month to make that extra payment. FYI: Generally, any debts reporting to your credit bureau are considerded "debt" when calculating your debt to income ratio. Also, Rent/Mortage Payment is also included. If you have a mortgage, but your payments don't include escrow tax, the tax will usually also be included in the calculation. Insurance payments, utilities, and other day to day expenses are not, which is why it is important to leave enough for the person to live on. (Hence the 50%) If you need anything else, just ask! Thanks for posting __________________ I have an aura of reliability and good judgement. Just in case you were wondering...