Mortgage rates are directly related to interest rates, and a rise or fall in interest rates will result in a rise or fall in mortgage rates. Rates are fixed or variable, meaning that they either remain the same for the duration of the mortgage or vary depending on a benchmark interest rate. Lenders determine the mortgage rates in most cases. Mortgage rates are the rate of interest that is charged on a mortgage.See below for estimated DTI percentages and how they relate in terms of your budget (what you can afford in monthly payments based on the information you have provided).Generally, the lower your DTI, the greater probability you will have of qualifying for a loan. Lenders frequently consider the higher your DTI, the more difficult it will be to make your monthly payments. A DTI score of 36% or less is often regarded as affordable by lenders – hence a range that we recommend.This range will help you figure out what you can afford and also helps lenders determine your approval status for a mortgage loan. Generally, DTI is displayed as a range of 20% to 50% and reflects an estimate of the top and bottom of your affordability.Monthly debt / gross monthly income = DTI %.Your DTI is estimated by dividing your total monthly debt by your gross monthly income.It is very important to provide your monthly debt and annual income amounts accurately to estimate your DTI. This does not include mortgage payments, rent or regular expenses like food, transportation and utilities. Your monthly debt is the sum total of all your recurring payments such as personal loans, auto loans, student loans, credit card payments, child support, and any other expenses that you would find on your credit report. Debt-to-Income (DTI) identifies the percentage of your gross monthly income (the amount you earn before tax) that goes towards your monthly debts.
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