💰 What You Need to Qualify for a Loan

Summary

This video explains how lenders determine whether you qualify for a loan, focusing on debt-to-income ratio and property appraisals. The lender adds up all monthly expenses (including student loans, car loans, credit card bills, and PITI, which is the property's principal, interest, taxes, and insurance) to determine your debt number. Then, they divide that number by your gross monthly income (salary divided by 12) to get your debt-to-income ratio, which ideally should be between 43% and 50%.