All Posts Tagged With: "ratios"
FHA Mortgage Basics
It all started in the 1930s when the government began insuring home mortgages. This was a big deal because it meant that homes could be purchased with little down and with loans that lasted more than five years — the norm at the time.
Since the program began in 1934 the government has insured more than [...]
9Dec2009 | Peter G. Miller | 0 comments | Continued
What are the basic FHA loan qualification standards?
Under FHA rules, in general terms up to 31 percent of your monthly income can be used property mortgage principal, mortgage interest, property taxes, and property insurance (PITI). Up to 43 percent of your income can be used for PITI plus monthly bills such as car payments, student loans, etc.
For instance, if you have [...]
What Are “Front” and “Back” Ratios?
Different loan programs use different calculations, or ratios, to qualify would-be borrowers.
The “front” ratio is generally equal to your monthly costs for principal, interest, property taxes, and property insurance (what lenders call “PITI”). The “back” ratio includes the front ratio plus all regular monthly costs such as credit card payments and auto payments.
For [...]
What happens if I want a mortgage but have not reported all my income to the IRS?
Lenders can only count reported income when calculating qualifying ratios. If they have any hint that a portion of an applicant’s income is unreported, they will (or should) walk away — the logic being that a federal tax lien takes precedence over a mortgage claim.
You will need to amend your returns and pay all [...]
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