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Thread: So, what's a good debt/income ratio?

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  1. #1 So, what's a good debt/income ratio? 
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    This board is so full of knowledge, let's get a few answers to this question.

    I run a small marketing firm from home. I bring in about $110,000.00 a year. Operating expense runs about $50,000. So I net about $60K a year.

    Our bills are a total of $2200 a month, is this a decent ratio? We will be looking at homes at the begining of the year.

    Thanks
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  2. #2  
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    It all depends what you will be paying for your home and what interest rate you will be getting...

    On the surface, I would say you are doing pretty good...

    Ken
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  3. #3  
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    I would say that if you lived here in CR thats a pretty damn good income...but if you live in the state making that..i'd have to say you're making ends meet depending where you live.
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  4. #4  
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    I hope you don't live in California.
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  5. #5  

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    if 60,000 is your gross income before paying taxes, than you are not doing so well. you are currently OVER 40% on your debt/income ratio.

    you should seriously consider paying some bills off before applying for a mortgage.

    im also basing this on the idea that your current home bills are not included in that $2200 per month. debt to income ratios do NOT count bills such as electric, phone, cable, etc.

    only car payments, credit card bills, student loans, and things like that count.

    mortgage companies will prefer you are at or below the 32% mark. some of the more aggressive companies will accept 36% and less.

    hope this helps.
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  6. #6  
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    Most places that income would hold up fairly well...low bills is key IMO...most people waste so much money on BS its ridiculous!

    depending on if BigBet has a family or a spouse earning money is also a factor
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  7. #7  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    Well, with car, credit card and student loan it is only $385 a month. The $2200 a month is all bills, electric, cell, rent, insurances, spending, grocery, etc...<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by RPM:
    if 60,000 is your gross income before paying taxes, than you are not doing so well. you are currently OVER 40% on your debt/income ratio.

    you should seriously consider paying some bills off before applying for a mortgage.

    im also basing this on the idea that your current home bills are not included in that $2200 per month. debt to income ratios do NOT count bills such as electric, phone, cable, etc.

    only car payments, credit card bills, student loans, and things like that count.

    mortgage companies will prefer you are at or below the 32% mark. some of the more aggressive companies will accept 36% and less.

    hope this helps. <HR></BLOCKQUOTE>
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  8. #8  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    no family, just a wife. and if she keeps her shit up, i will be single! <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Journeyman:
    Most places that income would hold up fairly well...low bills is key IMO...most people waste so much money on BS its ridiculous!

    depending on if BigBet has a family or a spouse earning money is also a factor <HR></BLOCKQUOTE>
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  9. #9  
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    Here's a link with lots of resources that can help you.... take a close look at the "calculators" section.

    http://money.cnn.com/
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  10. #10  

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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by bigbet1234:
    Well, with car, credit card and student loan it is only $385 a month. The $2200 a month is all bills, electric, cell, rent, insurances, spending, grocery, etc <HR></BLOCKQUOTE>


    based on $385 per month, your debt to income is excellent. you should have no problems.

    also, before applying for a loan, i recommend you pull all 3 of your credit reports WITH SCORES. it will cost you about $39 at www.myfico.com and will save you a ton of money in the long run. if you have any problems with your credit reports or scores, let me know, ill be glad to teach you how to fix your credit.

    you want your middle score to be at least 680 or higher before you apply for a mortgage.
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  11. #11  
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    So in reality you make much less than that...

    Married: That means she gets half

    Posting on this site: That mean you gamble

    Id say you're closer to 15K A year...

    Mom's basement is looking pretty good right now, right??
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  12. #12  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    Say what you must! <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by LongIslandTico:
    So in reality you make much less than that...

    Married: That means she gets half

    Posting on this site: That mean you gamble

    Id say you're closer to 15K A year...

    Mom's basement is looking pretty good right now, right?? <HR></BLOCKQUOTE>
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  13. #13  
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    Relax bro..im just goofin around
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  14. #14  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    oh, yeah, i forgot, my mom doesn't have a basement, she lives in a trailer<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by LongIslandTico:
    So in reality you make much less than that...

    Married: That means she gets half

    Posting on this site: That mean you gamble

    Id say you're closer to 15K A year...

    Mom's basement is looking pretty good right now, right?? <HR></BLOCKQUOTE>
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  15. #15  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    so am i <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by LongIslandTico:
    Relax bro..im just goofin around <HR></BLOCKQUOTE>
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  16. #16  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    Thanks RPM, I will keep that in mind when I start pulling everything together.

    also, does it matter how long you have been self-employeed?<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by RPM:
    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by bigbet1234:
    Well, with car, credit card and student loan it is only $385 a month. The $2200 a month is all bills, electric, cell, rent, insurances, spending, grocery, etc <HR></BLOCKQUOTE>


    based on $385 per month, your debt to income is excellent. you should have no problems.

    also, before applying for a loan, i recommend you pull all 3 of your credit reports WITH SCORES. it will cost you about $39 at http://www.myfico.com and will save you a ton of money in the long run. if you have any problems with your credit reports or scores, let me know, ill be glad to teach you how to fix your credit.

    you want your middle score to be at least 680 or higher before you apply for a mortgage. <HR></BLOCKQUOTE>
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  17. #17  

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    bigbet,

    a lot of things will revolve around your credit scores. one of them is your being self employed.

    for instance, you can get a NO INCOME VERIFICATION LOAN if your credit score is in the 700's. then you dont have to worry about the debt to income or anything.

    pull those scores soon. if there are problems, it will take a couple months to fix them.


    btw, the bengals suck!~ (except for their coach.)

    go ravens!~
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  18. #18  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    My wife has a bankruptcy on her report from about 3 years ago. How do you go about clearing that up?<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by RPM:
    bigbet,

    a lot of things will revolve around your credit scores. one of them is your being self employed.

    for instance, you can get a NO INCOME VERIFICATION LOAN if your credit score is in the 700's. then you dont have to worry about the debt to income or anything.

    pull those scores soon. if there are problems, it will take a couple months to fix them.


    btw, the bengals suck!~ (except for their coach.)

    go ravens!~ <HR></BLOCKQUOTE>
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  19. #19  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    Bengals use to suck, but they are making the turn around 3rd and heading home<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by RPM:
    bigbet,

    a lot of things will revolve around your credit scores. one of them is your being self employed.

    for instance, you can get a NO INCOME VERIFICATION LOAN if your credit score is in the 700's. then you dont have to worry about the debt to income or anything.

    pull those scores soon. if there are problems, it will take a couple months to fix them.


    btw, the bengals suck!~ (except for their coach.)

    go ravens!~ <HR></BLOCKQUOTE>
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  20. #20  

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    cant get the bankruptcy off, but knowing that, i garuntee there are things that can and NEED to be fixed.

    also, if your wife has no income, you may be better off getting the mortgage without her on it.
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  21. #21  
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    If thats the case, you might also want to claim her as a dependent...That would help come tax season as im sure you are well aware of.
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  22. #22  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    We are looking to clear her's up anyways. We have read books, but she gets nothing but high interest credit card offers.

    How does one begin to do this?
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  23. #23  

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    the first step is to pull all 3 of her credit reports. then, you start improving her scores by having the innacurate info removed. (i garuntee there is innacurate info, such as credit cards she filed on still reporting her as being late on payments).

    like i said, pay the $39 bucks, and give me a hollar. id be glad to help.
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  24. #24  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    RPM, I just pulled mine and i have a 738, 750. They could not pull my other report, they were asking question on loans 2 years ago.

    one more question. my wife leases a car. on her report it says the lease was included in the bankruptcy, but we have been paying on it for years now. but it is not showing an on time payment in the reports.

    Can this be fixed?

    her score is a 578

    Thanks for all your help
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  25. #25  
    Home of the Cincinnati Criminals. bigbet1234's Avatar
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    also, if you correct say experian report, does it also come off transunion if it is false?
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