HOUSING RATIO – WHAT IS IT?
Buying a new home is exciting, but there are plenty of factors that play a role in the approval. One of them is your housing ratio. This is the percentage of your income the lender feels you can allocate towards your home loan. It influences their decision as well as how much money they will approve for your household to borrow.
This is often referred to as the housing expense ratio or the front-end ratio. When you search for a home, a pre-approval is a good idea. It tells you if you can get a loan and how much you can borrow.
It doesn’t make sense to blindly look at homes and hope for the best! Knowing your price range lenders will assist you with making buying a home easier and practical.
