Jimmy Vercellino is one of the nation’s top VA Home Loan mortgage originators. A Marine veteran, he and his team work hard to help veterans take advantage of their VA loan benefit and become homeowners. From start to finish, they guide their clients through the process and make it as smooth and stress-free as possible. Visit the site at https://www.valoansforvets.com VA Loans for Vets NMLS#184169 5050 North 40th Street, Ste 260 Phoenix, AZ 85018 (602) 908-5849

2. Buying a home requires
the borrower to meet
certain requirements,
including sufficient
income, good credit
scores and possibly a
down payment.

3. Another requirement is
that the borrower’s
debt-to-income (DTI) ratio
be a certain number.

4. Here is the rundown on DTIs,
including how they’re
determined and why they
are so important.

6. Your debt-to-income
or (DTI) ratio is the
total of all your
monthly debt divided
by your gross
monthly income.

7. Although lenders use
your income and
credit scores when
determining your
ability to repay your
loan, they also put a
high emphasis on
your DTI.

8. Because, even if you
have a high income
and good credit
scores, you may not
be able to make
monthly mortgage
payments if you have
a lot of other monthly
debts.

9. Before they approve a
loan, they want to
have the belief in your
ability to repay it on
time.

11. It’s relatively easy to
determine your DTI.
Add up all your monthly
debt payments and
divide the total by your
gross monthly income.

12. Gross monthly income is
not the amount of your
paycheck that you take
home.

13. Gross monthly income is
the amount you earn at
your job before
deductions such as taxes,
health insurance, etc., are
taken out.

14. Then you add up the total
of your monthly debt
payments.

15. Monthly debt payments
include rent, credit cards,
loan payments and any
debts you pay to
creditors.

16. Once you’ve determined
the total of your monthly
debts, divide them by gross
monthly income.

17. For example, you earn a
gross monthly income of
$2,000 and your spouse
earns $3,000.
Your total gross income per
month is $5,000.

18. Your monthly debts are $500
for rent, $200 for your car
payment and $300 in total
credit card payments for a
total of $1,000 ($500 + $200
+ $300).

19. You take the $1,000 and
divide it by $5,000, and your
DTI is 20 percent.

21. Every year thousands of
people lose their homes to
foreclosure or bankruptcy.

22. In probably all these cases,
the homeowner never
thought this would happen
and made every attempt to
make the monthly
payment.

23. Sometimes a homeowner
fails to make monthly
payments due to situations
beyond their control, such as
illness, the death of a
breadwinner or loss of a job.

24. In some cases, it happens
because the homeowner’s
DTI was just too high and he
or she could not afford to
keep up with the payments.

25. Research shows that the
higher the DTI, the more
likely the borrower is going
to have difficulty keeping up
with monthly payments.

26. Most banks and lenders will
not loan money to an
individual with a DTI higher
than 43%.

27. This doesn’t mean the DTI
must be 43%.
It means it’s the highest it
can be.

28. here are certain
circumstances where a
creditor will approve a
mortgage loan with a higher
DTI if they have determined
that the borrower will still
have the ability to make the
payments and pay the loan.

30. When lenders calculate
your DTI, they use:
• Mortgage or
rent payments
• Credit cards
• Auto loans
• Student loans
• Property taxes

31. • Mortgage
insurance
• Homeowner’s
insurance
• Lines of credit
payments
• HOA fees

32. Even though they may be
paid each month, payments
for food, utility bills, gas for
the car …

33. cell phone bill, cable bills or
entertainment are not
including in monthly living
expenses.

34. Jimmy Vercellino, an
experienced professional with
mortgage lender First Choice
Loan Services, works hard to
provide a personalized home
loan process for you.

35. Options include FHA and VA
loans, fixed / adjustable rate
mortgages, Jumbo loans and
more.