DTI's and FICO's - Will change your %
When buying real estate there are so many factors that go into what your mortgage rate will be. One of the main factors of what will determine a higher or a lower rate would be your FICO score. But, there is another factor that the banks will look at is your DTI - Debt to Income Ratio. Now lets just say that these both do go hand and hand - but in some ways don't.
Debt to income ratio is exactly what is sounds like. What is your debt compared to your income? To figure this out you would take all your loans, mortgages, car payments, taxes and 
credit card debt (easy way to figure this out would be - what are your debts that are showing up on your credit report). Take all the minimum monthly payments that are for all your REPORTED debts and divide that amount by your monthly gross income. If you are having a hard time figuring this out use Bankrates DTI calculator.
As a general rule, you want that "number" the DTI ratio not to exceed 36%. If your DTI is higher than that number most banks will look at you as someone who has alot of debt, and your rates of course will be higher than someone who has a good FICO score and a low DTI.
Not alot of Realtors will bring this up or even mention this to most buyers. BUT - when a buyer is looking to buy a Co-op - this is a major factor in what the boards will look at. They will also include or take into account what your FUTURE mortgage and maintenance fees will be and they will add that into your ratio - which will bring your DTI number higher.
What are you to do if your DTI is too high?
- First off, pay off your debt. You don't want to close the creditor accounts, but by paying them off it will increase your FICO as well as your DTI.
- DON'T Buy anything new on credit, until you close on your property. This will also help your FICO as well as DTI.
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