Annual Income

The total income you (and your co-buyer/borrower) take home each year before taxes.

Monthly Debts

How much you spend toward loans of all kinds, like credit cards, cars, or student loans. This will help determine how much you spend on other expenses per month and help assess what a healthy additional home payment expense could be.

Debt-to-Income Ratio (DTI)

This is a percentage calculated based on the two definitions above, your income and debts. In order to qualify for some types of loans, you need below a certain percentage of DTI. A loan officer from Homie Loans™ can help you figure out what kind of loan you might qualify for.

Down Payment

Your down payment is how much you plan to put down on the home you wish to buy from your pocket. You are not always required to have a certain percentage of the home’s value to put down, but it may affect the type of loan you get and it may add an additional cost to your monthly payments.

Loan Types

Conventional loans are some of the most common. They are not backed by the government, but they do adhere to the government standards for lending. They do require a certain percentage of DTI and downpayment to qualify.

FHA stands for Federal Housing Administration. They are a type of loan that is backed by the government. Typically lower-income borrowers qualify for and use these loans because they do not require as high of a credit score or down payment.

VA loans are backed by the Department of Veteran Affairs. They assist US veterans, active duty service members, and military families in buying a home. You don’t have to have a minimum credit score, and you don’t need a down payment.

USDA loans are a type of loan that requires no down payment and is meant for buyers moving into rural areas. These loans are backed by the United States Department of Agriculture. The DTI threshold is a bit higher than traditional loans.

Interest Rate

Interest rates fluctuate federally, by loan type, and by loan company. There are two types: fixed or variable. Fixed rates are locked in at the time you get your home loan. It will remain the same throughout time or until you refinance. A variable rate will change as the rates change overall.