Debt Ratio Calculation

Homeowners need to pass the HAMP debt ratio requirement in order to qualify for a Wells Fargo loan modification.  This calculation sometimes confuses borrowers, and since it is so important to understand, using a HAMP loan modification calculator can be a big help to make certain you have done it right.

What is debt ratio and how does it work with a Wells Fargo HAMP loan modification?  The simple explanation is that the bank needs to verify how much of your household gross monthly income is being spent each month on your housing costs.  Your financial worksheet must prove that the current mortgage is unaffordable, but it must also prove that you fit into the Waterfall Method of Modification and that your mortgage can be modified to an affordable monthly payment.

WELLS FARGO LOAN MODIFICATION DEBT TO INCOME CALCULATOR

Here is the simple and sure way to verify that your financial worksheet will

Debt Ratio Calcuated for You

pass the approval guidelines:

1. Use the Worksheet to itemize all of your monthly income, monthly expenses and assets.
2. Input that information into the Loan Mod Calculator in the corresponding fields
3. The calculator will instantly compute and display your debt ratio-showing you if you are passing or failing and where to make the required adjustments before submitting
4. The loan modification calculator also computes your asset ratio, loan to value, cash flow, Waterfall Modification, potential new loan terms including rate, term and principal reduction.
5. Use this critical information to fine tune your own budget until you are passing all the categories on the Calculator, then use this adjusted financial information on your final application form to send into Wells Fargo for review.

Perfect RMA Application!

Debt to Income ratio is just one of 7 approval triggers you must pass in order to qualify for a Wells Fargo loan modification.  Unless you know ahead of time just where and how to adjust your own financial worksheet, it is extremely difficult to know just what the bank needs to see from you to approve your application.  The HAMP calculator takes the guess work away, and provides the important information you need to know ahead of time.

Get the real help and real answers you need with the #1 selling resource for homeowners-The Complete Loan Modification Guide kit and Loan Mod Quick APP calculator.  This proven system provides you with the information you need-the loan mod calculator instantly computes and

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displays your own specific income, expenses and asset requirements.  Get started now-visit MyLoanModificationCenter.com.

Target Payment 31%

Before you send in your Wells Fargo loan modification application, you need to make sure that your income and debt ratio are passing the approval guidelines.  This means that the financial worksheet you submit indicates the correct and acceptable amount of monthly gross income, monthly expenses and assets-otherwise you will be turned down for the help you need.

How do you check your own debt ratio and income to make sure that they are passing the Wells Fargo loan modification guidelines?  This can be tricky and confusing for homeowners-after all, if you should too much or too little income you will be instantly denied.  The approval formula is not provided to borrowers, and trying to guess at what you need to show will not work.  Here is some basic information about what the bank is looking to see on your application.

WELLS FARGO LOAN MODIFICATION DEBT RATIO AND INCOME REQUIREMENTS

1. Your current debt ratio must pass a critical test-the amount of money you spend each month on housing expenses (payment, property taxes, insurance and any HOA dues) must be great than 31% of your gross monthly income.  If that percentage is lower than that, then you will be denied HAMP.
2. Your monthly gross income must be high enough to pass the
   

   Sample Budget Displayed

   Waterfall Method of Modification, but not too high or you will not fit into the program guidelines.  You can verify the exact amount you will need by running your budget through the easy to use, loan modification calculator program-then make any necessary adjustments to pass.

3. Your debt ratio after the loan modification must equal 31%-meaning your new target mortgage payment will be affordable and maintainable.  The only way to achieve this is to show exactly the right amount of monthly gross income on your application form.

Yes, it is confusing-in fact the number one reason most borrowers are turned down for a Wells Fargo loan modification is due to debt ratio and income requirements!  You can avoid this same mistake by verifying your figures before submitting-use the powerful and helpful loan mod calculator to compute the exact figures for you.

Get the real answers you need-use the #1 best selling resource for

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homeowners, The Complete Loan Modification Guide kit and Loan Mod Quick APP calculator.  This powerful system has been used by thousands of homeowners-get the information you need to apply correctly.  The loan mod calculator automatically computes and displays your specific debt ratio,  income requirements, expenses and assets, eliminating guess work and increasing the chance of approval.  Get started now-visit MyLoanModificationCenter.com today.

Debt Ratio Explained

The Wells Fargo loan modification debt ratio requirement is a calculation that confuses some struggling homeowners.  If you don’t understand how this important approval guideline works, then read more about it so that you can be prepared to submit your application correctly.

The debt ratio calculation is used to determine if you will meet the basic approval formula for a Wells Fargo loan modification-in fact it is one of the very first things that the bank will look at.  If you don’t pass this guideline, then you will be turned down instantly.  Here is what this calculation is all about:

WELLS FARGO DEBT RATIO EXPLANATION

Take the total of your monthly mortgage expenses (payment, monthly taxes, monthly insurance and any HOA dues) the divide that by your Household Gross Monthly Income to arrive at your debt ratio percentage.

FOR EXAMPLE:  Total monthly mortgage expense is $2500 – total monthly gross household income is $4200  Debt ratio is 59%.

What is the acceptable debt ratio to qualify for a Wells Fargo loan mod?  Your current ratio must be greater than 31% – otherwise you will not be deemed in a financial hardship situation.  The goal of the new loan terms will be to achieve a new mortgage payment-including taxes, insurance and HOA-that equals that 31% figure.  If you already have a mortgage expense that is below that percentage, a loan mod will not benefit you.

Confused?  Don’t feel bad, most homeowners do not really understand how this calculation figures into the loan modification eligibility.  Debt ratio is

7 Approval Triggers Computed

only one of 7 approval triggers that Wells Fargo looks at on your application-so it is critical that you pass all of them in order to qualify.  The loan modification calculator will automatically compute your own debt ratio and the other 6 triggers as well.  This is really about the math-so make sure you do everything you can to get it right the first time.

Get the real help and real answers you need to prepare your Wells Fargo loan mod application-use the best selling, #1 resource for homeowners.  The Complete Loan Modification Guide kit and Loan Mod Quick APP calculator

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provides you with the 7 approval triggers and automatically computes your very own specific income, expense and asset requirements for your financial worksheet.  Avoid mistakes-get started right, visit MyLoanModificationCenter.com.

What are the debt ratio guidelines for Wells Fargo loan modification?  This is a very important calculation that the bank uses to determine if a homeowner is eligible, so it is critical to understand how it works and more importantly, how to find out if your own debt to income ratio will be acceptable.

One of the first loan mod approval triggers is your debt ratio-this is the figure that represents how much of your gross monthly income is going towards your housing expenses each month.  You need to fit into the guidelines based on your own income, house payment, property taxes,

Debt Ratio Calculated for You

insurance and any HOA dues.  This can be confusing to figure out because most homeowners have never done this before-that is where using the powerful loan modification calculator can be a huge help.

Wells Fargo debt ratio guidelines are standard for everyone, but each individual homeowner’s situation is different.  How much monthly income and what the current mortgage expenses are will vary-so you need to use the mathematical formula that is going to specifically figure your own ratios.  To make this easy and avoid mistakes, use the Loan Modification Calculator to automatically calculate and generate your very own financial worksheet that shows:

1. Your current front end debt ratio-the first loan mod approval trigger that you must pass
2. Your current back end debt ratio-this represents all of your monthly debts as opposed to your monthly income.
3. Your new modified Target Payment based on your income and current mortgage terms
4. Your new loan mod terms-rate, term, principal reduction and total new payment to expect

Pass Guidelines

Remember, if you don’t pass the initial Wells Fargo loan modification debt ratio guideline you will be turned down immediately-so it makes sense to know ahead of time if you need to adjust your monthly budget before you submit it.  The loan mod calculator will help you avoid mistakes and give you the best shot at getting approved the first time-when you use the same formula the bank does you are giving yourself the inside formula for success.

Get the #1 selling resource for homeowners-The Complete Loan Modification Guide kit and Loan Mod Quick APP calculator.  This powerful tool gives you the information you need-debt ratio, expense and cash flow, new loan terms – calculated and displayed automatically to help you make

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the needed adjustments to your budget to qualify.  Visit MyLoanModificationCenter.com to get started right away.

Confused about the debt ratio requirements for a Wells Fargo loan modification?  Don’t feel bad-you’re not alone because most borrowers do not understand how this calculation works or how it affects their chances of loan mod approval.  Here is some helpful information that you need to know before you submit your own application forms.

Debt Ratio Calculation

WELLS FARGO LOAN MODIFICATION DEBT RATIO REQUIREMENT

1. First of all, debt ratio is defined as a calculation that demonstrates the percentage of gross monthly income that is spent on housing-meaning how much of your income goes to your house payment, property taxes, insurance and HOA dues each month.  This information is derived from the information you supply on your financial worksheet.
2. The bank wants to see that your current debt ratio exceeds 31% in order to pass the requirements for HAMP-the government loan mod program.  This means that more than 31% of your GROSS income is going towards your housing expenses.
3. If your pass this first trigger for Wells Fargo  loan modification approval, then the bank will check your financial worksheet for the total debt ratio-this means all of your other bills combined with your housing expenses.  There is no cap on this figure, but if it is over 55% you may be asked to attend credit counseling as a condition of loan mod approval.
4. The goal of the loan workout is to give you an affordable lower mortgage payment that will equal just 31% of the household gross monthly income-this must be reached by lowering the interest rate to 2%, extending the loan term to 40 years or in some cases reducing the principal balance.  If your monthly income is too high or too low, you
   

   Debt Ratio & 7 Approval Triggers Shown

   will not pass and you will be denied.  You can run your own monthly budget through the loan modification calculator to verify that your figures are acceptable-if not, then make the necessary adjustments before you submit for review.

Your debt ratio is only one of the Wells Fargo loan modification requirements for approval-there are 7 triggers that must be passed in order to qualify for a lower mortgage payment.  The process can be confusing for borrowers, but since the formula is just math, you can actually learn how to use it yourself and have the inside information you need to get approved.  Don’t just guess at what it takes to qualify, use the loan mod calculator to find out how to prepare your financial worksheet correctly for the best chances of approval.

Avoid mistakes-get it right the first time!  Use the #1 resource for homeowners, The Complete Loan Modification Guide kit and Loan Mod Quick

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APP calculator to help you prepare your Wells Fargo financial worksheet correctly.  It automatically displays the debt ratio requirements, monthly income, expenses and assets you need to show-allowing you to fine tune your budget before you submit it for final review.  Visit MyLoanModificationCenter.com for more information and get started today.

Debt Ratio Formula

Wells Fargo loan modification help requires that homeowners pass the debt ratio qualification guideline.  This approval criteria is standard under the government loan mod plan, and all borrowers who apply for a loan workout will be reviewed to determine if they meet this calculation.  What is the debt ratio requirement and how can you be sure to pass it in order to qualify?

The Wells Fargo loan modification debt ratio calculation is a standard formula that uses the amount of gross income spent each month on housing expense by the borrower.  This is a percentage figure that shows the bank if the current mortgage payment is unaffordable, and also determines what the new modified mortgage payment will be.   Homeowners must pass this first approval trigger in order to be considered for a loan mod, so it is very important that the application form be prepared correctly before it is submitted for review by the bank.

Homeowners can use the loan mod calculator to automatically figure their debt ratio, and find out immediately if their financial information will pass the required Wells Fargo loan modification approval guidelines.  The

Sample Monthly Budget-Follow It

application form includes a detailed breakdown of the homeowners monthly income, monthly expenses and current bank balances.  This financial information is then used by the bank to determine if the debt ratio criteria has been passed.  Homeowners can make sure their budget is acceptable by running it through the loan mod calculator first, verifying where any adjustments need to be made, and fine tuning the figures so that the calculator displays a passing on every approval trigger.

The Wells Fargo loan modification debt ratio calculation is one of 7 approval triggers that must be passed-the loan mod calculator automatically figures and displays for the homeowner if they are passing or failing.  Making the necessary adjustments to the budget before sending it in for review is the very best way to increase the chances of approval.

Guidelines Met!

Get help with your Wells Fargo Loan Modification-use the #1 best selling resource for homeowners.  The Complete Loan Modification Guide kit and loan mod calculator provides everything you need-step by step directions, required forms and the calculator generates your very own sample monthly budget that you can

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follow to be sure you pass the approval guidelines.  Visit MyLoanModificationCenter.com for more information today.

Debt Ratio Formula

Homeowners must pass the Wells Fargo HAMP loan modification debt ratio guideline in order to qualify for help.  Understanding how this approval trigger works is key to getting approved-the lender will carefully review the homeowners application and financial information to determine if the borrower fits into this important guidelines.  What is debt ratio and how do you know if you are going to pass?

WELLS FARGO HAMP LOAN MODIFICATION DEBT RATIO EXPLANATION

Debt Ratio:  A percentage figure that represents the amount of gross monthly income spent each month on housing expenses.

Housing Expenses:  The total of the current mortgage payment, monthly amount of property taxes, homeowners insurance and any HOA dues as applicable

Required Debt Ratio:  Wells Fargo HAMP loan modification approval

WFB HAMP 2011

requires that your current debt ratio for housing expenses exceed 31% – if yours is less than this figure then you will not qualify for the government program

Debt Ratio Calculation Formula:  Total monthly housing expense divided by total gross monthly income = DTI percentage

Back End Debt Ratio:  The percentage of income spent each month on all monthly expenses, housing and all other bills.  Groceries, gasoline, credit cards, etc all go into the formula.  If this exceeds 55%, you may be required to attend credit counseling before the loan modification will be made permanent.  The HAMP calculator will do all these calculations for you automatically.

Sample Monthly Budget-Follow It

The reason the debt ratio is considered on a Wells Fargo HAMP loan modification is because this provides the lender with a good idea of your overall financial situation and demonstrates clearly that your current mortgage payment is too high and is not affordable.  The debt ratio formula is also used to determine what your new modified mortgage payment will be, this new target payment needs to be low enough to be affordable and sustainable.

Confused about debt ratio calculations and need help with your Wells Fargo HAMP loan modification application?  Increase your chances for approval-use the #1 best selling resource for homeowners, The Complete Loan Modification Guide kit and HAMP calculator.  This important tool kit will provide you with everything you need to complete your loan mod forms

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correctly, and the HAMP calculator automatically figures your debt ratio, target payment and 5 other approval triggers.  Your very own sample monthly budget is provided that you can follow to ensure that you pass all the guidelines.  Visit MyLoanModificationCenter.com for more information today.

Getting approved for a loan modification with your mortgage lender can be a frustrating and confusing process.  There are many factors that are considered before your lender will offer you a loan workout and a lower mortgage payment.  The best way for a homeowner to have a good shot at getting approved is to learn the basics and then take the time to prepare their application so that it fits right into the program guidelines for acceptance.  Here is one of the factors that lenders consider for loan mod acceptance.

CREDIT SCORE AND NPV RESULTS-HOW IT AFFECTS YOU LOAN MODIFICATION

Does your current credit score have anything to do with whether you get

Pass NPV Test

approved for a loan modification?  Most borrowers think that because their credit score has taken a beating during their financial hardship that it will hurt their chances of getting approved for a loan workout.  In fact, it is just the opposite!

One of the first calculations that mortgage lenders perform when reviewing a loan modification application is called NPV-Net Present Value.  This is basically a mathematical formula that takes into account:

1. Current mortgage balance vs. current market value of home – loan to value ratio
2. Debt ratio of homeowner-monthly income
3. Credit score of borrower-financial hardship
4. Waterfall Method of Modification terms-how aggressive does the loan workout need to be in order to hit the new target payment

In this case, the lower the credit score, the better for the chances of qualifying for a loan modification.  If the credit score is still high, say over 700, then the lender cannot justify a true financial hardship situation on the borrowers behalf.  If all the bills are still being paid on time, then the homeowner should be able to pay the current mortgage.  In the case of a high credit score, the NPV test may fail and the lender may deny the loan modification.

Sample Monthly Budget-Follow It

Many homeowners who apply for a loan modification are denied because they did not understand the basics of what it takes to qualify-it is important to remember that it is not a subjective process.  There are formulas based on mathematical equations using the homeowners financial information and property status that are analyzed on every application.  Either you pass the formula or you don’t – and your approval depends on passing.  That is why it makes sense to work on your financial statement and application ahead of time, fine tuning your figures so that you can feel confident you fit into the program guidelines.

Learn the loan modification basics and get help to prepare your application correctly.  Use the #1 resource for homeowners, The Complete Loan

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Modification Guide Kit and loan modification software calculator provide you with everything you need – step by step directions, required forms, and the calculator automatically generates your very own sample monthly budget to show you where you are passing or failing the guidelines.  Visit MyLoanModificationCenter.com for more information.

Debt Ratio Formula

When you apply for a Wells Fargo loan modification you will be asked to complete an application form – one section includes a detailed accounting of your monthly budget.  Your income, expenses and bank balances must be disclosed and based on the information you provide the bank will determine if you qualify for a loan workout.  Your debt to income ratio will be analyzed based on your income and monthly housing expense, so this is a critical part of the application that is important to do correctly.

The most common Wells Fargo loan modification debt to income monthly budget questions are:

1. How do I calculate my own debt ratio?  First total your current mortgage payment, monthly property taxes, monthly homeowners insurance and any monthly HOA dues.  Then divide that total amount by your household Gross monthly income.  The resulting figure will be your housing debt ratio.  You can use the loan modification software
   

   Sample Budget-Automatically!

   calculator to figure this for you automatically to avoid mistakes.

2. What is the acceptable debt to income ratio for my loan modification application?  HAMP requires that your current housing ratio exceed 31% – this is because your new modified target payment will be set at 31% – if you already have that or lower then you will not qualify.
3. Do my other expenses count towards my debt to income ratio?  Not for this initial calculation-it is just your housing expenses.  The back end debt ratio will include your other monthly bills and your house payments too.  However, you must first pass the housing debt ratio criteria to proceed.
4. Can I use my Net Income for the debt ratio calculation?  No, the federal HAMP guidelines mandate that the gross household monthly income be used.  This is confusing for some borrowers because the net income is what you live off of, but for this program you must use the Gross income figure.
5. Is there any way to change my debt to income monthly budget to pass the approval guidelines?  Yes, it is a good idea to run your budget through the loan modification software calculator first to see if you are passing the approval triggers, and then make any necessary adjustments before you submit your final paperwork for review.  If you income is too high or too low, it is best to make the necessary changes before Wells Fargo reviews it.  You may need to get a room mate or second job to qualify.

Download immediately!

Need help with your Wells Fargo loan modification application and completing your monthly budget?  Use the #1 selling resource for homeowners, The Complete Loan Modification Guide kit and loan modification software program. This step by step kit will provide everything you need – detailed directions, required forms and a sample monthly budget you can follow to prepare your own application correctly.  Visit MyLoanModificationCenter.com for more information.

Debt Ratio Formula

How does the Wells Fargo HAMP loan modification debt ratio requirement work and what can a borrower do to make certain that they are passing the guideline for approval?  Debt to income ratio is one of the 7 standard triggers for loan mod approval under Obama’s plan, so it is important to understand what this guideline means and how to figure your own calculation to increase your chances of approval.

It’s not surprising that the majority of homeowners have never even heard of debt ratio and do not have any idea how this calculation affects their chances of a Wells Fargo HAMP loan modification.  However, this is such a big part of the approval process that it makes sense to take a few minutes to learn a bit about how this guidelines works.

HAMP DEBT RATIO EXPLAINED:

The basic calculation to compute your debt ratio is simple, take your total monthly housing expenses (payment, property taxes, homeowners insurance and any HOA dues) and divide that by your gross (before taxes) monthly income.  The resulting percentage is your Housing Debt Ratio.

Do you pass?

Example:  House payment    $ 1000

Monthly property taxes               100

Homeowners Insurance                  30

HOA dues                                               75

TOTAL Housing Expense:       $1205 divided by gross income = Debt Ratio

The Wells Fargo HAMP loan modification requirement for your housing debt ratio states that your current mortgage expenses must be greater than 31% DTI.  So, when you do the above calculation and the results are higher than that 31%, you know that you have passed the first trigger for loan mod approval.  If that figure is below the requirement, then you are not a good candidate for a HAMP loan modification.  You could still be in a financial hardship situation, but it is probably due to other expenses.  You may be eligible for some other type of loan workout plan.

There are other Wells Fargo HAMP loan modification approval requirements in addition to the debt ratio, and these include Asset Ratio, Disposable Income, Imminent Risk of Default, etc.  You can use the loan

Sample Budget-Automatically!

modification software calculator to help you determine if you are passing these guidelines, this program will automatically display the results for you.  When you put in your own income, expenses and bank balances the calculator immediately calculates and displays the results – showing you just where you may need to fine tune your figures to pass all of the HAMP guidelines.

Make sure your debt ratio is passing the Wells Fargo HAMP loan modification requirement – use the #1 selling resource for homeowners, The Complete Loan Modification Guide kit and Loan Modification Software calculator. The easy to use kit and software will give you a sample monthly budget to follow and show you how to complete your HAMP application correctly to have the best chance of approval.  Visit MyLoanModificationCenter.com for more

Download immediately!

information and get started right away.