Two ratios are calculated by mortgage lenders to determine a buyer’s maximum loan amount:1) the front ratio and, 2) the back ratio.
Front Ratio: The total mortgage payment including principal, interest, taxes and insurance (PITI) as well as any condominium or homeowner association fees divided by your total GROSS income. Traditionally, this ratio must be below 30% Example: With a gross income of $5000 per month, a total mortgage payment (PITI) of $1350, the front ratio would be 27%.
Back Ratio: The total mortgage payment PLUS any car payments, credit card and any other loan payments including student loans divided by your total GROSS income. Traditionally this must be below 40%. Example: With a gross income of $5000 per month, a total mortgage payment of $1350, a car payment of $325, 1 credit card payment of $60 and 1 student loan payment of $150 for a total of $1885 with a back ratio of 38%.
For more information or to set up an appointment call Julie at (703)765-0300.If you need help calculating your ratios, please contact Julie Nesbitt at 703 765 0300.
What Does a Realtor Do?
Realtors are required by law to:
- perform necessary and customary acts to assist in the purchase or sale of real estate.
- perform these acts in good faith and with reasonable care.
- properly account for money or other property placed in his or her care.
- disclose “adverse material facts” which are, or should be, within the agent’s knowledge.
Realtors can help buyers pre-qualify for mortgages and keep abreast of the latest home listings. They can assist sellers in preparing their homes and screening potential buyers. They can show investors the properties that fit their risk profiles and long-term investment strategies.
Nesbitt Realty can quickly locate the perfect home for you. Our agents can efficiently organize and coordinate meetings with potential buyers and sellers.
A Nesbitt Realty Realtor will be well acquainted with the important things you’ll want to know about the neighborhood you may be considering:
- the quality of schools,
- the safety of the community,
- traffic volume,
- price,
- Metro accessibility
- nearby parks and attractions
Our agents have immediate access to homes as soon as they are put on the market, saving you hours of wasted drive-around time. When you’re ready to make an offer on a house, our Realtor will help structure the deal to save you money. He or she will explain the advantages and disadvantages of different types of mortgages and guide you through the mounds of paperwork.
