5 Tips to Get Approved for a Mortgage

2. Calculate Your Debt-to-Income Ratio

The debt-to-income ratio should be calculated to see how much of the monthly pre-tax income is to be spent on debt repayment. If this ratio is high, debts need to be reduced before applying for a mortgage. Typically, the back-end debt-to-income ratio should ideally be less than 36%. This covers the mortgage and other debt obligations. The front-end ratio including the mortgage-related expenses needs to be below 28%.