If your debt service ratio (DSR) is in good shape, great news! You are one step closer to getting your home loan approved.

Your calculated DSR shows a bank how much of your income is used to pay back your debts to help the banker determine how likely you are to repay the home loan that you are applying for. You should try to maintain a DSR range of 30% - 40%.

Calculate your DSR using this equation:

Total Monthly Commitments / Total Monthly Income X 100% = Debt Service Ratio

This process will take some time and you may need some help checking your work. IQI can help you with that for free. They will also help you to narrow your search to find a property that sits within your DSR quota.

Now that you have calculated your DSR, you may find that the properties available to you are not up to par with your standards. You may decide to work on improving your DSR first before settling for something less.

Start with these steps to get the results you need to get your dream home -

1. Look at your net income. Is there anything you can do to increase that? Now go for it.



2. Make some small sacrifices. In the long run, your DSR will thank you for cutting back on some of your monthly expenses.



3. Get it over with and pay off some of your existing debts.



4. Lastly, borrow less.

Good luck. Your dream home is already yours, you just need some digging before you get to it.