Friend Bank “Set Your Budget” form
1. What is your debt to income ratio?
a. This is the percentage factor of what your payments are in comparison to what your income is.
b. This percentage factor should never be over 40%; however sometimes an exception can be made.
c. This percentage can be determined by dividing you total monthly payments by your total monthly income. Example: If you total monthly payments are 1400.00 per month and your total monthly income is 3500.00 then your debt to income ratio is 40%. (1400 / 3500 = 40%)
List the monthly payments of all who will be applying for this credit. (Only credit responsibilities)
1. Mortgage / rent payment:
Home owner’s insurance payment if applicable:
2. Automobile payment:
3. Credit card payment:
List the monthly income of all who will be applying for this credit.
1. Employment income
2. Interest income
3. Child support income
4. Retirement income
5. Alimony income
Divide your total payments by your total income and you will have your debt to income ratio: ____________%
You are welcome to use the Friend Bank loan calculator (www.friendbank.net) to find what your new mortgage payment will be. This way you can determine how much you can afford to pay while staying within the perimeters of a safe debt to income ratio.