Top Highlights

• Loan officers increase their commissions by giving you a higher interest rate than par.
• I know from years of personal experience that this kind of price gouging is rampant in the mortgage industry. Charging a higher interest rate than par is just one way for loan officers to collect extra pay. Most people are aware that there are also unnecessary “junk” fees.
• debt-to-income ratio, or DTI. Depending on the lender, the total DTI allowed is usually 40 to 45 percent. This means that when you add up all of the payments listed below, it cannot be more than 45 percent of your gross monthly income (income before taxes and other deductions).
• Then, to figure out the ratio, follow these steps: 1. Take the gross income for all borrowers. Multiply it by 0.45. 2. From that number, subtract all your loan payments and credit card payments. 3. What is left is the maximum amount you can afford for your total house payment (using a 45 percent DTI).
• www.mortgage-helper.com to get the loan amount you qualify for. Simply type in the payment you desire and the interest rate.