You hear it all the time during a housing search: debt-to-income ratio, A bank
won't grant you a mortgage unless you fall within specific ratios, and you won't
get passed an NYC co-op borad if you are wallowing in too much debt. So how
do you figure out where you fall?
Take this simple formula to figure out what your current gross deb-to-income
ratio is:
1) What is your gross annual salary?
2) Divide that number by 12 to get your monthly gross income.
3) What are you currently paying in monthly debt? (Credit cards, student loans,
auto loans, mortgages, insurance, property taxes and so on.)
4) Take your currently montly debt payments (3) and divide by your current
monthly income (2).
This is your debt-to- income ratio.
Sheila McKinney
