There are basic procedures that must be followed by the bank, particularly when a person comes and applies for a mortgage loan. Those procedures include: credit history checking, loan status, and loan history. Those procedures usually take several weeks. The bank is also the only party that will decide whether you are qualified for a mortgage loan. Those procedures also involve something called debt to income ratio. We will examine the term later.
Basically, such ratio is used to calculate the amount of money you own and the amount of loan you are applying. In essence, debt to income ratio is a measurement tool often used for comparing your financial power and amount of the loan given by the creditor. The amount of debt to income ratio will be shown when a person wants to finance his new car, new house or other type of properties. In recent times, you can create such tool easily. There are templates for debt to income ratio calculator that can be downloaded easily.
You can download one of those templates here. Instead of just using it for loan application, you can also use it to measure your personal financial health. Because, if your debt-to-income ratio is higher than standard ratio, you should try to eliminate some debt or your life will be fully dedicated to pay your debt. So, be wise with your loan and expenses :).
Debt to Income Ratio Calculator (12.5 KiB, 1,240 hits)