The back ratio includes your housing costs plus your other monthly debt like car payments, credit cards, credit union loans, student loans and so on. It does not include your automobile insurance, life insurance, and similar debt items. For most loan programs, your monthly obligations to debt should be approximately 38% of your monthly gross income and preferably less.

If you earn annual bonuses or commissions, those can be taken into account, too, but they will be averaged over the last two years. If you qualify under these you’re pretty well set and should have a problem securing traditional financing. If you don't, you still have options, especially if you have absolutely great credit, a lot of money, or friends and parents.

Good Credit
These are called compensating factors in loan jargon. Suppose you have a great FICO score, above 700 or so. People with really high FICO scores almost always pay their debts, no matter what. Lenders will stretch their debt-to-income ratios somewhat to fit you in as you are a good risk.

Stated Income Loans
If the lender is stretching you too far and you have a great FICO, you might qualify for a stated income loan with a lower down payment than those who merely have a good credit score. You’ll still have to make a down payment, usually at least ten percent. But with a stated income loan, you simply state your income on the loan application. Because of your good credit and down payment, the lender "trusts" you and does not verify your income. Lenders don't want you to misrepresent of course as they review your bank statements and determine if cash flow through your account matches your claimed income. They’ll also check your assets and personal property owned to see if all matches your application.

Larger Down Payment
If you have a good or great FICO and still need the lender to stretch your qualifying ratios a bit, they generally will do so if you can put twenty percent down. If that doesn't help by itself, 20% down and a good FICO will normally let you into the "stated income" loan, too..

Friends and Relations
So how do these help? First, if you’re nice they can give you money. Lenders term this a gift. Maybe you pay it back, maybe you don't. If you do intend to pay it back, don't tell the lender.