Most mortgage loan providers consider your debt to income ratio when giving you a loan. This ratio shows your ability to repay the borrowed money, so it’s important to be calculated.
This ratio shows the amount you owe compared to your total monthly income. To calculate the amount of your debts you need to sum up all your monthly debt payments (the so-called recurring debt): car, student and other loans, credit card payments, taxes, insurance, interest and other possible payments.
Then divide this amount by the gross monthly income. As a result, you get a number that is required to be less than 36.
If you have debt to income ratio below 36, you will get more chances to get a mortgage. This also shows your solvency and financial stability. So, consider this ratio in your personal financial revision.
Some more tips about the home buying process can be found here:
Hidden costs when buying your first home.