Your monthly costs should not exceed 29% of your gross monthly income for a FHA Loan. Total housing costs often lumped together are referred to as PITI.
P = Principal
I = Interest
T = Taxes
I = Insurance
Monthly Income x .29 = Maximum PITI $3,000 x .29 = $870 Maximum PITI
Your total monthly costs, or debt to income (DTI) adding PITI and long-term debt like car loans or credit cards, should not exceed 41% of your gross monthly income.
Monthly Income x .41 = Maximum Total Monthly Costs $3,000 x .41 = $1230 $1,230 total - $870 PITI = $360 Allowed for Monthly Long Term Debt
FHA Loan ratios are more lenient than a typical conventional loan.
NMLS: #218312 | Company NMLS #1838
Terms, conditions & restrictions apply. Subject to underwriting approval. Application required; not all applicants will be approved. Property insurance and other documentation may be required. Loan secured by a lien against your property. Consolidating or refinancing debts may increase the time and/or the finance charges/total loan amount needed to repay your debt. Fees and charges may apply, and may vary by product and state. Taxes & insurance extra. Appraisal and other fees paid outside of closing (POC) are non-refundable. Important information relating specifically to your loan will be contained in the loan documents, which alone will establish your rights and obligations under the loan plan. Call for details.