First-time Home Buyer Tips
At Loanbox Mortgage, we are committed to help you discover the best options that work within your budget and lifestyle. In that way you will not be rushed into making decisions, overextending your budget, or sacrificing what you want.
To help you understand better, we have provided more information below on how your debt-to-income ratio is computed. Your debt-to-income ratio includes your front-end and back-end ratios.
Your front-end ratio, also known as mortgage-to-income ratio, is a comparison of your gross monthly income and your projected housing expenses or mortgage payments:
HOA Dues and/or PMI
The Front End Ratio should typically not exceed 38 to 45% of your gross monthly income. For example, if your average monthly income is $10,000, your total mortgage, taxes and insurance payment should be between $3,800 and $4,500.
Your back end ratio will include your front end payment plus other monthly payments you’re obligated to pay such as credit card payments, child support and other loan payments.
Monthly Car Payments
Min Credit Card Payments
Child Support and more
The Back End Ratio should typically not exceed 45 to 55% of your gross monthly income. For example, if your average monthly income is $10,000, your total back end, which includes your mortgage payment, should be between $4,500 and $5,500.