Hello! This is Joe Harris with Morgan Financial and here is your “Joe Knows Mortgages MINUTE”. This week, we answer the question: If you have debt, can you still qualify for a loan? Between car loans, student loans, and a few credit cards, it can be easy to feel like you may have too much debt to qualify for a mortgage. This is not necessarily true. The best way to figure out how much debt you can afford to carry is to calculate your debt-to-income ratio, or DTI. Calculating your DTI is simple. Simply add up your recurring monthly debt obligations such as a car payment, minimum credit card payments, student loan payment, and anything else that you are required to pay on a monthly basis that shows up on a credit report. Things like electric bill, water and phone do not count. Take your total and divide that by your gross monthly income, or your income before taxes. The resulting number is your DTI. Typically, lenders will want your debt to income ratios to be under 45%, however, there are some loan types that will go higher. A lender will take this number and factor in your potential mortgage payment. Thank you for tuning into this Joe Knows Mortgages MINUTE If you have any home loan related questions, we want to hear from you! SO please comment down below! Also, please feel free to like and share this information with your family and friends. See you again next Monday!

Does it take longer to get a VA loan compared to other loans? With the right lender, a VA loan shouldn’t take much longer than any other loan. In fact, Morgan Financial is averaging under 10 days from signed application to clear-to-close on all loans, including VA loans.

What is the difference between Conforming and Nonconforming loan? When it comes to conforming vs non-conforming, we look to our good friends Fannie Mae and Freddie Mac. A conforming loan means that the loan meets the specific criteria that allows Fannie Mae and Freddie Mac to buy them. A non-conforming loan is one that doesn’t meet the criteria and isn’t allowed to be purchase by our friends Fannie and Freddie. These types of loans are sometimes referred to as portfolio loans.

A portfolio loan or portfolio mortgage is a loan that a lender makes, and then keeps the loan to service for the life of the loan. It becomes part of their Investment portfolio.

If you plan on using both you and your spouse’s income to jointly qualify for a loan then, yes your spouse’s credit score is taken into consideration. If you were to choose to exclude their income, and exclude them from the loan, then only your credit score will be evaluated.