Debt to Income ratio- To buy a House

Debt to Income ratio (Used to buy a House)
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1. Front End Ratio- % of income toward mortgage payment, real estate taxes, insurance, dues
Divide the above line items with the gross monthly payment
Multiply this by 100
RESULT- Front ratio should be 28% or low.
CONCLUSION- This ratio gives your affordability if house payments.


2. Back End Ratio- % of debt income to gross payment
debt income includes bills, credit card payments, other expense, car payments, college bill payments, (INCLUDES HOUSE MORTGAGE AND REAL ESTATE TZES, DUES)
Divide the above line items with gross monthly payment
Multiply this by 100
RESULT- Back End ratio should be 36% or low
CONCLUSION- This Ratio gives your affordibility of house payments with all the debt you owe.