Wednesday, October 28th, 2009

Debt ratio?

debt ratio
christina.yost asked:


my debt ratio is 27.00%… i personally bring home $3,000 a month (my husband brings home about the same). i have no credit, my husband has pretty bad credit. will debt to income ratio be a factor in buying a house? how likely am i going to be able to buy a house with just debt ratio?

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4 Responses to “Debt ratio?”

donfletcheryh Says:
October 30th, 2009 at 8:32 pm

You would be way into sub-prime if you have not a significant down pauyment. I strongly advise against trying to buy without at least 10% down… even if you can get a 95% mortgage, have 10%, to keep a buffer to get you through any rough spots.

No creditor in today’s market will give 100% mortgage unless they are ripping you off on price or interest rates.

The Dragon Says:
November 1st, 2009 at 1:59 am

You can get a mortgage with no money down, and the rate is still good. I am a mortgage broker, and we do not rip everyone off, like the first person says. The problem is not the down payment, it is no credit score. Some programs allow you to build a credit score by showing phone bills etc. This is a possibilty, email me for more information on that.

Personally I would open up a small credit card and pay on it for two months, and then your score may show up.

27% for mortgage purposes is fine, after the mortgage is included they like it under 45%. They problem once again is not the debt ratio it is no credit score. If this is your debt ratio, only showing your income and not your husband, you have a chance at buying a house, even without a credit score.

Katherine W Says:
November 2nd, 2009 at 9:44 am

Your debt ratio is 27%? Sounds bad. The normal rule is that your house payments should be about 28% of your income, and debts on top of that shouldn’t be more than about 6%. Right now, you’re not in a position to buy a house until you can live on what you make. You need to create a credit history for yourself and your husband needs to clean up his. A house is not out of the question, it’s just in the future until you realize what you need to do. Start reading books (from the library) on the subject, and also look on the net.

Steve R Says:
November 5th, 2009 at 7:43 am

You have to get your debt ratio under 15% before trying to buy a house.

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