How your ratios affect your home buying power.
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.
Northern Virginia is a part of the National Capital Region it is home to some of the most educated, affluent and particular buyers in the nation. Everyday we help folks relocate in and out of Northern Virginia as well as help locals advance their real estate goals. If you're shopping for a home in Northern Virginia, you will find our Buyer's Guide to Northern Virginia Real Estate is a great resource for understanding the area and for seeking out the perfect real estate match for your tastes and budget.
If you need any help with a specific search please don't hesitate to call us at (703)765-0300.
[What makes us different!]