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ErikOk

Rent vs Income

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How do you all usually figure out if a Tenant/buyer can afford the rent?

 

I've always went by gross monthly income times 30%

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DTI that lenders look at is 43$ DTI

That is GROSS monthly x 43% then deduct the REPORTING debt, such as car payment etc and include the rent.

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DTI that lenders look at is 43$ DTI

That is GROSS monthly x 43% then deduct the REPORTING debt, such as car payment etc and include the rent.

So say Gross monthly pay is $3200.

You would do $3200 x 43% = $1376. Then you are saying you would subtract stuff like credit card debt, car payment, AND rent amount?

 

By doing it this way, are you trying to see if you are going over or have some left over from the "Gross monthly pay X 43%"?

 

I have followed the Gross income x 30% like shown here http://www.teachamantofish.biz/rental_calculator.cfm , which works out to 30%.

 

I am guessing that the way you show is more accurate by accounting for all debt. Is this the thought behind the 43%?

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Lenders look at 43% DTI (yes there are some variables...but...just look at 43% DTI)

Take gross monthly..

 

Say 3200zx 43% = $1376

NOW..subtract the REPORTED MONTHLY PAYMENTS

Car...$300

Credit cards $125

Student loans...$150

= $801

They need to stay under $800 a month.

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