How Debt-to-Income Ratio Affects Mortgage Rate

There a new article on Inman News that does a good job explaining the affects of debt-to-income ratio on mortgage loan qualification and terms.

Specifically, the article is a Q&A session about a woman who obtained an adjustable rate mortgage and feels she is paying too much interest on the loan. Obviously, a borrower's credit score plays a role in the type of mortgage terms they qualify for. But in most cases an ARM loan means you pay less interest during the introductory period.

So why is this woman paying such a high interest rate on her ARM loan? That's the question examined in the article.

Read the article here

This scenario brings up an important point. You should never automatically assume you're getting the best interest rate from a mortgage lender. You should shop around, ask plenty of questions, and seek the independent advice of somebody who is (A) knowledgeable on the subject and (B) unbiased. The woman asking the question in this article felt that something wasn't quite right, so she asked for help from an unbiased professional. As a result, she may be well on the way to a better interest rate.

Happy home buying!

~Brandon