- 2 min read
Ethan Ewing, President of Bills.com, explains debt to income.
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in this dollars & sense video ethan ewing, president of bills. com, explains the debt to income ratio. commonly referred to as d.t.i. this mortgage term is used when speaking to a mortgage lender, a loan officer, or a financial planner. debt to income is usually represented in the form of a percentage. visit bills. com or by clicking here for a free mortgage rate quote and to receive more information.
"hi, my name is ethan ewing and i am the president of bills. com, i want to talk to you today about a very common mortgage term called debt to income, you will hear this all the time when you talk to a mortgage lender, mortgage broker, your bank, whatever it is, about refinancing your house or purchasing a new home. debt to income simply is the amount of debt you have, and this is monthly payments, so imagine you have $200 a month that you are making in credit card payments, $300 dollars a month that you are paying on car payments and call it $1,000 a month you are making on your current mortgage payment, that is $1,500 in debt, those are your monthly payments.
on the other side of that is your income, so you make $60,000 dollars a year, that is effectively $5,000 a month. you basically calculate that $1,500 into that $5,000, your debt to income is 30%. your debt versus your income is 30%. it is a very important term, underwriters when they are looking at new loans look at this very closely, and itâ’s a big deal they have to make sure youâ’re going to be able to afford your monthly payments moving forward. hope that helps, we'll see you next time."
The mortgage market: what's new?
No surprise that mortgage rates fluctuate. If you are thinking about purchasing a home or maybe considering refinancing your current mortgage, then you want to be up to date on mortgage rates.
Mortgage rates November 1, 2023
According to Freddie Mac, the 30-year mortgage rate for the week of November 1, 2023 stands at 7.76%. This 3 basis points decrease from the previous week's rate.
Additionally, Freddie Mac reports that the 15-year mortgage rate for November 1, 2023 is 7.03%, indicating a 0 basis points - no change - from previous week’s rates.
Note: A basis point is equal to one-hundredth of one percent (0.01%). In numerical terms, if the mortgage rate changes by 20 basis points, it means the rate has changed by 0.20%.
What does the mortgage rate mean for you?
Mortgage rates are one of the key factors that determine your monthly payment. Here are avergage interest rates (APR) for November 2, 2023 based on Zillow date for borrowers with a high credit score (680-740) in the United States:
- 30-year conventional loan is 7.70%
- 15-year conventional loan is 6.84%
Using the rates mentioned above, the monthly payment for a $279,082 30-year-year mortgage would be $1,990. A 15-year mortgage would require a monthly payment of around $2,484.
Explore your options and secure pre-approval today!
To make your life easier, we highly recommend shopping around for mortgages and getting pre-approved. This will streamline the home-buying or refinancing process and make it a breeze. Ready to get started? Check Out mortgage rates now for the best options available.