Purchasing a home is a significant financial milestone. Several factors influence home affordability, including income, credit score, and debt-to-income ratio (DTI).

Income: Lenders evaluate gross income, employment history, and income stability. Gross income refers to total earnings before deductions, while net income is the take-home pay. Key documents for income verification include pay stubs and tax returns.

Credit Score: Ranging from 300 to 850, a credit score indicates creditworthiness. A higher score typically results in better mortgage terms. Factors affecting credit scores include payment history, credit utilization, length of credit history, new credit inquiries, and credit mix.

Debt Service Ratios: Lenders assess Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to determine financial health. GDS ratio, which should be below 39%, measures housing costs against income, while TDS ratio, which should be below 44%, includes all debt obligations.

Improvement Tips: Enhancing income, maintaining a good credit score, and managing debts effectively can significantly improve home affordability. Stabilizing employment, reducing debt, paying bills on time, and avoiding new debts before applying for a mortgage are practical strategies.

Ready to turn your homeownership dreams into reality? Contact me today to explore your mortgage and real estate options and get personalized guidance. Together, we'll navigate the path to finding your perfect home. Start your journey now!

Kristin Delgado