REAL TipS: BUYING

Debt totals and loans

If you plan to buy a home, you may want to analyze a few aspects of your debt. Many lenders use ratios as guidelines for how big a loan they will offer. One ratio many lenders examine is your future monthly housing expenses (principle and interest payments on your loan as well as taxes and interest) divided by your gross income. Another ratio is your total debt-to-income ratio, which includes all housing expenses plus the monthly amount you pay toward any recurring debts, like car loans, credit-card payments, student loans, child support, etc. Some lenders like to see the first ratio no higher than 28%, and the total debt-to-income ratio at 36% or lower. Not all lenders follow these guidelines, and many will take other factors into consideration, so talk with your Texas REALTOR® to learn more about loans and lenders that may be best for your situation.

Texas Association of Realtors®