QUALIFY YOURSELF WITH A LENDER:
First-time homebuyers should know how much they can afford to spend before viewing homes. A mortgage lender can qualify a Buyer by calculating their debt-to-income ratio and factoring in a down payment. Buyers should have a good idea of what they can afford, both upfront and monthly, when it comes to their home. Though there's not a fixed debt-to-income ratio that lenders require, the old standard dictates that no more than 28 percent of your gross monthly income be devoted to housing costs. This percentage is called the front-end ratio. The back-end ratio shows what portion of income covers all monthly debt obligations. Lenders prefer the back-end ratio to be 36 percent or less, but some borrowers get approved with back-end ratios of 45 percent or higher.
PAM DEVENDORF, REALTOR/BROKER
COLDWELL BANKER RESIDENTIAL REAL ESTATE
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