I get the questions all the time from interested buyers, "How much am I qualified up to?" You would think this would be a simple mathematical calculation based on your current "Debt Service" compared to your "Gross Income". Not so fast... What people don't realize is the DTI Ratio changes based on your recent credit activity.
If you have recent negative trade lines on the credit report, a lender will adjust your allowable DTI from a perfect case of 55% down to 35%-40%.
What does that mean to you as a buyer? That means that the amount that you are qualified for could drop THOUSANDS of dollars just because you had a 30 days late pop up on your credit report.
Moral of the story is to ALWAYS pay your bills on time. If you have any recent credit issues and you are looking to buy a home, you should talk to a professional credit repair service.
I recommend Jason O'neil with Franklin Financial Group. His number is 904-637-4271 or you can visit his website at www.franklin-finance.com.
Good luck!
Wednesday, March 4, 2009
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