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tagged: bad credit, Bad Credit Mortgage, buying a house with bad credit, FICO score, get a loan with bad creditBack End Debt Ratio
Posted by GuestPoster in Personal Finances
Along with your front end debt ratio, this is a major determining factor in whether you get a mortgage loan or not. The front end debt ratio is how much of your monthly gross income is going to cover your overall housing expenses. The back end debt ratio is how much of your gross income goes to cover all of your debts. These debts include your mortgage, child support, credit card bills and basically any other debts you pay on a monthly basis. Lenders want to see a back end debt ratio below 36%, any higher than this and you are carrying too much debt. With FHA loans you can have a back end debt ratio up to 41% of gross income and still qualify but your best bet is always going to be to lower these ratios to make getting a loan easier.
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