Profitable real estate investment is subject to precise knowledge about many things.
Comprehensive and accurate knowledge of best real estate investment practices.
The purchase of any investment property for sale cannot be possible without complete knowledge about the political and financial market events. You need to keep an eye on events like Brexit and the newly introduced mortgage rules. Your bottom line definitely affects the real estate investment market and also your ROI.
• Types of mortgages.
• How to contract a mortgage?
• The type of investment property for sale for purchase.
• The type of auction events to attend based on your investment strategy.
• Financing options for real estate investments.
• How to finance or fund your real estate investment?
• How to modernize a foolproof exit plan?
• What to do if your investment plans don’t work out in your favor?
Many real estate investment agents in London are often seen advising/guiding new investors on these topics. But there is a topic that is barely touched by most agents. This is DTI (debt to income ratio).
What exactly is the debt-to-income ratio?
If you are likely to purchase a residential investment property for sale, you need to fully understand this concept.
DTI (Debt-to-Income Ratio) is actually the total of your monthly installment and revolving payments, further divided by your GMI (Gross Monthly Income).
What is GMI?
Gross monthly income is the wages earned by employees before taxes and other deductions.
The importance of DTI:
According to experienced London real estate investment brokers, DTI helps private lenders or financial institutions determine whether your loan application should be approved or disapproved. Below are some very important points considered by them before approving or rejecting your loan application:
• Your current monthly or yearly income.
• Your current credit score.
• Ability to pay the mortgage on time.
• Other mortgage/financial obligations.
In case any lender or financial institution denies your mortgage/loan application, then you have to blame your poor debt-to-income ratio for it.
That’s not the only thing you need to know about DTI. If you’re planning to buy a residential investment property for sale, you’ll need to learn a lot more important things about it. For example:
• What types of monthly bills do lenders consider when determining your debt-to-income ratio?
• What types of monthly bills do lenders not consider when determining your DTI?
• What is a good DTI?
• What counts as Income in the debt-to-income ratio?
• Can your loan or mortgage application be approved for low DTI reasons?
• Is it really possible to lower DTI to get better interest rates or loans/mortgages?
Now, you seem ready to learn about DTI (debt-to-income ratio) before you invest in a UK property. You should attend a couple of seminars and also get in touch with some experienced investors or brokers who are willing to share their knowledge and experience in this regard with you.