Loan alteration Help – What Is the permissible Debt Ratio to Qualify …
Your debt ratio is one of the most important qualifications when applying for loan alteration help. You may be confused about how this calculation works and how to compute your own. But, before you prepare and submit your loan alteration application make certain that you have calculated your debt ratio and made the necessary adjustments in order to be qualified for a loan workout with your lender so you have the best chance of success.
First of all, you need to understand just what debt ratio is and why it is so important when calculating which borrowers will qualify for a loan alteration. Basically, it is a percentage of your monthly gross income that goes towards your housing expense each month. Your housing expense is your loan payment, your monthly character tax amount, your monthly homeowners insurance and any monthly HOA dues you may have to pay. Keep in mind, that if your current mortgage payment allows for an interest only or neg am payment, that is the figure you must use for this calculation.
The lender cares about your debt ratio because this figure tells them just how unaffordable your current mortgage payment is and what percentage of your income goes each month to keep the loan current. If your debt ratio is too low, then that method that you should be able to provide your current mortgage payment. If it is too high, then that could average that your current payment is unaffordable and you have a authentic hardship situation that could make you eligible for a loan alteration.
What is too low and too high when it comes to loan alteration debt ratio? This can vary between lenders and investors, but the federal program called HAMP has a standard figure that they use. Your current payment must be more than 31% of your gross monthly income, and some investors have an overlay requirement that it be 38% instead. If you want to have the best chance of qualifying for a loan workout then you need to make sure that your financial statement proves that you meet the approval guidelines-and sometimes this method that you need to make some adjustments to your figures before you submit your application.
Thousands of borrowers have used a software program designed specifically to help compute the debt ratio, new target payment, new interest rate and other very important calculations on your loan alteration application. It is a basic, easy to use calculator that will provide the basic information needed to determine if your budget is fitting into the guidelines and where you may need to do some fine tuning in order to pass the criteria for approval. If you know that your financial statement is prepared correctly, and your figures are permissible, you will be a lot more confident when speaking with your lender and know exactly what you should be asking for so that you get the very best loan alteration you qualify for.