What can you tell me about the debt-to-income ratio lenders use to qualify borrowers?
Many lenders use two ratios when they decide whether to approve a mortgage. If, for example, the ratios are 28/36, 28% means the lender will allow a mortgage payment (including principal, interest, taxes and insurance) of up to 28% of the borrower's monthly pre-tax income. The 36% means all loan and credit payments cannot exceed 36% of the borrower's monthly income.
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