Thursday, January 28, 2021

Debt-to-Income Ratio Affects Approval & the Interest Rate

 

Debt-to-Income Ratio Affects Approval & the Interest Rate

Debt-to-Income ratio is a tool that lenders use to qualify buyers for a mortgage and is an important factor in determining loan approval.  It provides an indication of the amount of debt that a potential borrower is obligated to in relation to how much income they have.

Total monthly debts are determined by adding the normal and recurring monthly debt payments such as monthly housing costs, car payments, minimum credit card payments, personal loan payments, student loans, child support, alimony, and other things.

By dividing the monthly income into the monthly debt, you arrive at a percentage of the monthly income.  Lenders actually look at two different ratios commonly called the front-end and the back-end.

The front-end ratio is the proposed total house payment including principal, interest, taxes, insurance, mortgage insurance if required, and homeowner association fees.  Lenders generally don't want these expenses to be more than 28% of the monthly gross income. 

The back-end ratio includes the same items that are in the front-end ratio plus any other monthly obligations like the ones mentioned earlier.  Lenders prefer to see this ratio not to exceed 36% of monthly gross income but some lenders may extend that to 43%.  Borrowers obtaining an FHA mortgage might also be allowed an even higher back-end ratio.

If a borrower had $8,000 monthly gross income, their proposed house payment should not exceed $2,240 or 28% of their monthly gross income.  Then, their house payment and monthly debt should ideally not exceed $2,880 or 36% of their monthly gross income. 

For the sake of an example, let's say that their monthly debt was $900.  That would only leave $1,980 for the maximum house payment.  The monthly debt became a limiting factor affecting the house payment.

In addition to determining whether the buyer qualifies for the mortgage, it could affect the interest rate.  Having good credit and having the proper ratios can result in being approved for a mortgage.  On the other hand, if the debt is on the upper side of an acceptable range, the lender may charge a higher interest rate for the addition risk of a marginal borrower.

While the math is not difficult to come up with your ratios, it is not necessarily a do-it-yourself project.  A trusted lending professional can assess your situation and give you an accurate picture of what price home you can afford and the rate you can expect to pay.

Both things are important to know before you start looking at homes and especially before you contract for one.  All lenders are not the same.  Call me to get a recommendation of a trusted mortgage professional who specializes in the type of mortgage you want. Download this FREE Buyers Guide. 





Wednesday, January 27, 2021

Small Business and Charities Spotlight: MacK's in Downtown Aiken


Brandi and Vikki have always been big supporters when it comes to shopping local and donating to local charities. We always want to support our community and this year we to do a bit more. We are going to feature a local small business or charity in our videos once a month.


If you are a small business owner or or charity, or if you know of a small business owner or charity you would like us to feature give us a call or

message us. We would love to hear from you guys.


Brandi Cook and Vikki Crossland

Meybohm Real Estate

803.645.3325 | 803. 645.8008 | 803.702.4090

info@aikenhomes.com


#thesearchisover #aikenhomesteam #brandiandvikki #meybohmrealestate #theplacetobe #aikensc #augustaga #local #smallbusiness #charity #csra #donate #support #welcomehome #hometown #realestate #realtors #wesellscandga #licensedinscandga #weeklyvideo

#localspotlight #yourhomeyourlifestyleyourteam

Tuesday, January 26, 2021


We are so proud to have been able to help 118 families realize their real estate dreams in the Aiken-Augusta area last year! 2020 was definitely a "different" year for everyone, everywhere and we could not have made it through without the support of our clients, customers, colleagues and community. We look forward to continuing to make a positive difference in our clients and customers real estate experience(s), give back more to our community and to have another ridiculously amazing year in 2021.

Brandi Cook and Vikki Crossland
Meybohm Real Estate
803.645.3325 | 803.645.8008 | 803.702.4090 

#thesearchisover #aikenhomesteam #meybohmrealestate #theplacetobe #welcomehome #csra #aikensc #augustaga #realestatedreams #listingagents #buyersagents #homecoming #dreamhome #SOLD #wesellscandga #licensedinscandga #yourhomeyourlifestyleyourteam

 

Sunday, January 24, 2021

Iconic Aiken Cottage, 3489 Charleston Hwy AIKEN, SC 29801


Iconic Aiken Cottage, 3489 Charleston Hwy AIKEN, SC 29801

Iconic cottage that embraces a lifetime of sweet memories on 11.45 acres in the heart of horse country & prime farmlands; first time offering. The historic charm of yesteryear blended with many modern conveniences of today. Welcoming front porch, heartwarming wood floors, abundance of tall updated windows, intricate lovely moldings & fireplace mantels. Pastoral views, mature tall trees, gardens with heirloom plantings and colorful crape myrtles. Several large & small outbuildings, that can be repurposed to serve as equipment or feed storage, horse amenities, warehouse, tractors, car parking and more. This charming cottage/property has endless possibilities and potential. Ideal for a main residence, retreat, homestead, small horse farm or the person who prefers to be out of the hustle and bustle of city life. Estimated year built-1905 per family. All outbuildings sold in their “present” condition. Minutes to Downtown Aiken. Start your memories in this delightful Aiken cottage. #thesearchisover
$349,900 | 2,151 Sq. Ft. | 11.45 Acres | MLS #115077 Brandi Cook and Vikki Crossland - Meybohm Real Estate 803- 645-3325 | 803-645-8008 | 803-702-4090 #aikenhomesteam #meybohmrealestate #theplacetobe #aikensc #newlisting #homeforsale #land #cottage #retreat #welcomehome #listingagents #realestate #realtors #buyersagents #wesellscandga #licensedinscandga #yourhomeyourlifestyleyourteam

Wednesday, January 20, 2021

6 Reasons To List Your Home Now


Been on fence if now is the right time to sell your home? Let Vikki and Brandi give you 6 Reasons Why NOW is the time to sell. Vikki Crossland and Brandi Cook Meybohm Real Estate #thesearchisover #aikenhomesteam #meybohmrealestate #theplacetobe #realtors #realestate #timetosell #sellersmarket #buyersmarket #homesoldsuccess #realestateteam #realestatedream #dreamhome #welcomehome #SOLD #listingagents #buyersagents #wesellscandga #licensedinscandga #yourhomeyourlifestyleyourteam

Welcome Home to 534 Long Shadow Drive


Tucked away in awarding winning community of Cedar Creek where you can be active as you want to be. Remarkable home that is only two years young and is BETTER than NEW. This spectacular home offers a split bedroom plan, extensive amount of hardwood flooring, volume ceilings, desirable features and offers a casual but elegant lifestyle. 3 Bedrooms | 3.5 Bathrooms | Bonus Room| 2768 Sq. Ft Priced at $429,900 this perfect home will NOT last long. Vikki Crossland and Brandi Cook Meybohm Real Estate #thesearchisover #aikenhomesteam #meybohmrealestate #theplacetobe #aikensc #cedarcreek #BETTERthanNEW #dreamhome #welcomehome #realestate #realtors #listingagents #buyersagents #teamwork #newlisting #casuallifestyle #elegantlifestyle #wesellscandga #licensedinscandga #yourhomeyourteamyourlifestyle

Thursday, January 14, 2021

Vikki and Brandi's 2021 Real Estate Forecast


Sunny with a strong chance of home sales!


2020 was a great year for us and we are hopeful 2021 will be even better! Inventory is still low but so are interest rates! Been thinking of making a move? We can help you sell your home and buy your next. Give us a call, we'd love to discuss your real estate goals.


Vikki Crossland and Brandi Cook

Meybohm Real Estate


#thesearchisover #aikenhomesteam #meybohmrealestate #theplacetobe #homeownership #realestate #realtors #realestateforecast #welcomehome #whatayear #letsgetit #SOLD #listingagents #buyersagents #csra #wesellscandga #licensedinscandga #timetosell #realestateagent #realestatemarket #timetobuy #dreamhome #aikensc #augustaga #yourhomeyourlifestyleyourteam

Tuesday, January 12, 2021


Our team member, Ryan Cook has earned his certification as a Military Relocation Professional! Ryan decided he wanted to offer the best customer service he can to our military service members and we are so proud of his dedication to better understand the process and procedures of military relocation.

Vikki Crossland and Brandi Cook
Meybohm Real Estate

#thesearchisover #aikenhomesteam #meybohmrealestate #theplacetobe #SOLD #militaryonthemove #mrp #militaryrelocationprofessional #certification #realtors #csra #wesellscandga #licensedinscandga #yourhomeyourlifestyleyourteam