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LA Digs - Northeast LA Real Estate Blog

Welcome to LA Digs, the real estate and Northeast Los Angeles community blog written by Realtors Tracy King and Keely Myres.

Here, we share tips, market updates, and local news bits to keep you informed on what's happening in Northeast Los Angeles and the surrounding neighborhoods. Read on to learn about the latest in your neighborhood!

How much income do you need for a home loan?

How much income does a borrower need to qualify for a home mortgage loan? A borrower's monthly debt must be approximately 45% of their monthly income. To qualify for a mortgage, a borrower must pass two debt tests: 1. Housing Debt - The housing cost must equal approximately 40% of the borrower's monthly income. a. The housing cost = Mortgage, Taxes, and Insurance b. If the housing cost $4,000, income should be approximately $10,000. c. $4,000 is 40% of $10,000. 2. Total Debt - The housing cost is added to all consumer/credit card debt. The total debt must be approximately 45% of the borrower's monthly income. a. If the total debt is $4,500, income should be approximately $10,000. b. $4,500 is 45% of $10,000. 3. To calculate the borrower's debt ratio, divide the debt by the income. a. If the monthly housing cost is $3,200 and the monthly income is $6,500, divide $3,200 by $6,500. This would yield a housing debt of 49%. b. In this instance, the housing cost is too high to qualify. Information provided by Paul Cawthorne,
Loan Officer
NMLS # 249035
Prospect Mortgage
A Direct Lender
Phone: 310-499-8128
Fax: 877-809-7969
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
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