Two of the main ways Illinois mortgage lenders figures out the mortgage amount a borrower will qualify for are with debt-to-income ratios and monthly income. These will also decide the Illinois interest rates a borrower pays on the purchase price of their home. The process is a bit complicated and best left to Illinois mortgage lending professionals, but it is a good idea for potential home buyers to understand the basic income and debt qualifiers.

The maximum mortgage amount a borrower can pay is figured by the debt-to-income ratio. This is a guideline an Illinois mortgage brokers will use before working with various lenders. The debt-to-income ratio is the percentage of a home buyer's monthly income that they will be using to pay debts, including potential Illinois mortgage payments.

Illinois mortgage brokers usually calculate the debt-to-income ratio with a guideline of 33 to38. This is because the cost of an Illinois mortgage loan should typically take up about 33 percent of their monthly income. Other debts, including car payments and credit cards, should take up no more than 5 percent of the home buyer's income for them to qualify for a good Illinois mortgage loan.

There are always exceptions to the rule, as with the standard debt-to-income ratio for Illinois mortgage loans. Borrowers do, however, always get the best Illinois interest rates and mortgage repayment options when they fit these guidelines. The guidelines are the strictest for borrowers who make a small down payment on their Illinois mortgage loan, as well as for people with poor credit. People who make large down payments and have good credit can enjoy more relaxed guidelines on the debt ratios for their Illinois mortgage rates. Different programs also have different standards.

There are also income requirements for Illinois mortgage loans. Obviously, people with higher incomes with qualify for the lowest Illinois interest rates and have the most options, but there's more to it than that. Salaried employees who don't earn bonuses will have the easiest time. They can simply hand over a paycheck stub to an Illinois mortgage broker and quickly figure out which mortgage loans they will pre-qualify for. Teachers don't always work all year, however, and have special rules. Teachers, nurses, seasonal employees, construction workers and part-time workers can add their income figures from the last two years of W2s and divide it by 24.

People who earn bonuses, commission and overtime will have more difficulty working with Illinois mortgage brokers to figure out their monthly income. Mortgage lenders average monthly income from sources over the last two years, which are then added to regular salary or hourly monthly income. The same procedure for figuring out part-time employees' incomes usually works. Self-employed people must also show a two-year track record to qualify for most Illinois mortgage loans.

There are many ways that people get paid, and many different debts people pay out of their salary. These will drastically affect the Illinois mortgages a person qualifies for, and the Illinois interest rates on the qualifying loan. Having a good idea of income and debt ahead of time is the best way for Illinois mortgage shoppers to be prepared before thinking about getting a mortgage to pay for a home.