Mortgage rates have been unstable for quite sometime now. With mortgage rates constantly rising and falling, no one can say where they will be in the future. Rates are still low compared to where they were last year at this time. If you are considering purchasing a house or refinancing your existing mortgage loan, act fast to lock in some of the best mortgage rates offered at Total Mortgage.
Purchasing a house is a huge financial decision and a commitment which requires a lot of planning, researching and shopping for the best rates available. There are a number of factors that play role in getting low mortgage rates. One of them is having a low debt-to-income (DTI) ratio.
Debt-to-income ratio is an important aspect lenders check to find out if a borrower can afford the mortgage loan he/she has applied for. DTI ratio is calculated by dividing the borrower’s total monthly debt payments by their total monthly income. The monthly debt payments comprise monthly expenses such as mortgage payments, credit card payments, student loan payments, car payments and child support payments. The monthly income includes the borrower’s monthly salary, his/her spouse’s income, or side incomes.
Having a low debt-to-income can help borrowers get some of the best mortgage rates available. Lower DTI ratios mean the borrower has less debt and is financially sound. This shows that the borrower is more likely to pay off his/her debt, creating an ideal candidate for a low mortgage rate compared to someone with a higher debt-to-income ratio who is seen as a riskier borrower who receives a higher mortgage rate.
Different mortgage products may require different debt-to-income ratios. For conventional mortgages, DTI are typically 28/36 and for an FHA mortgage loan, DTI is 31/43. Having a low DTI will definitely help borrowers get lower mortgage rates. Also DTI can help borrowers keep track of their expenses as well as check their buying power.
Total Mortgage has some of the best mortgage rates available. For more information on our current mortgage rates and mortgage products, please call 877-868-2503 to speak with a licensed mortgage expert today.
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