How relevant is my salary to a lender?
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How relevant is my salary to a lender?
Ron Goodlin (Mortgage Banker and Broker, The Goodlin Group) gives expert video advice on: Will lenders look at my bank accounts?; What can I do if I am rejected for a mortgage loan?; How much of my monthly payment is considered interest? and more...
Your salary is very relevant to a lender because we take what's called "debt ratios." We take what's called your "Principal, Interest, Taxes and Insurance" divided by your gross income; that's what called your "front-end debt ratio." Your back-end debt ratio is, once again, your PITI plus any monthly debt that you have, and we divide that by your gross income. Those are debt ratios, and they usually need to fall in between 28 to 36. So, yeah, you definitely need to have the income to support the mortgage that you want to obtain.