There are so many moving parts to the homebuying process, and as a new homeowner it can be easy to get lost. A key factor in determining if you qualify for a mortgage is your debt-to-income ratio (DTI).
Whether you acquired debt from credit cards, a car, student loans or a mortgage, you’re likely to have borrowed money at one point in your life. These debts can eventually reach a point where you’re overwhelmed at the thought of paying them back. According to Nerd Wallet, in 2020 the average American household owed over $7,000 in credit card debt and over $56,000 in student loan debt. Managing your debt effectively will allow you to pay down the money you owe, without gaining more interest. There are some common methods for paying off your debts like debt snowball and debt avalanche.
Tax season is right around the corner, and with the pandemic, deadlines have been extended. On July 15, annual taxes are due, but one difference that might affect your returns is the child tax credit. So what has changed? Here’s what you need to know when filing your taxes.
Aside from your credit score and credit history, mortgage lenders will also determine your “ability to repay” through your debt-to-income ratio or DTI ratio. It’s the part of your monthly gross income that you use to repay monthly debts. As someone planning to take out a mortgage, you need to understand DTI to figure out if you need to improve it to increase your chances of getting a lender approval.
Millennials who have plans on becoming a homeowner in a couple of years from now should work hard to improve their credit scores. While credit score provider FICO recently revealed that the median score is now pegged at 706, most millennials only have an average score of 668, which means many have “poor credit.” There are easy ways millennials can do to start improving their credit scores.
The recent Equifax global settlement in connection to a massive data breach, only proves that identity theft is almost impossible to avoid. As security information experts continuously work hard to protect our sensitive information, cybercriminals also work double-time to find security loopholes to steal our information. Although it’s almost impossible to avoid identity theft and fraud, there are steps we can do to reduce its risks.