The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt. With a conventional loan, this qualifying ratio allows only 28% toward housing and 36% towards housing and other debt

A standard ratio used by lenders limits the mortgage payment to 28 percent of the borrower's gross income and the mortgage payment, combined with all other debts, to 36 percent of the total. The fact that some loan applicants are accustomed to spending 40 percent of their monthly income on rent -- and still promptly make the payment each time -- has prompted some lenders to broaden their acceptable mortgage payment amount when considered as a percentage of the applicant's income. See similar questions...

A lender may tell you that its qualifying ratios are 28/36. The 28 means that 28% of your gross monthly income can go toward housing expenses described above. The 36 means that 36% of your gross monthly income can go toward all of your monthly debt, including housing debt. This amount is often referred to as the "total debt-to-income ratio" or "back-end ratio". This can include monthly payments on credit cards, installment loans (auto, student loans, etc. See similar questions...

This is the ratio used to determine how much of a mortgage you can afford. This is calculated by dividing your monthly obligations by your monthly income. See similar questions...

The debt to income ratio is your total monthly housing expense plus any recurring debts (i.e. monthly minimum credit card payments, car payments, student loan payments, etc.) divided by your monthly gross income. See similar questions...

Yes. Short-term debt doesn't count as long as it can be paid off within 10 months. And some regular expenses, like child care costs, are not considered debt. Talk to your lender or real estate agent about meeting the FHA debt-to-income ratio. See similar questions...

Your income and outstanding financial debts make up your income-to-debt ratio. This helps the Lender to determine whether you qualify to repay the proposed loan. In order to determine that the Lender adds your total monthly loan payments &/or the proposed loan and divide with by the gross monthly income to determine your ratio. If the ratio falls within a particular range, you may qualify for the loan. See similar questions...

Here are some of the most frequently asked questions at United Mutual Funding. If the question you have is not on this page- please feel free to give us a call at 1-800-752-5166. See similar questions...

The ratio is determined by weighing your total debt against total income. For example, if your income is $100,000 annually and your debt totals $30,000, then your debt-to-income ratio is 30%. There is no maximum debt-to-income ratio on conforming loans and 38% to 50% on jumbo loans—the range depends on the loan program. In some cases, F&M Mortgage Group has approved loans with that hover at 70%. See similar questions...

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A high debt-to-income ration means that you're a riskier customer for a creditor. So before you apply for a loan, work on getting your debts paid down. This includes consumer loans, credit cards and even student loans. If you do have to apply for a loan before you pay down your debts, you may still be approved for the loan, but it will most likely have a higher interest rate. See similar questions...

The Federal Housing Administration (FHA) insures some mortgage loans so that more lenders are willing to make loans to borrowers who might not be able to qualify for other loan types. This is true for borrowers with sketchy credit histories or because of high debt-to income ratios. With a FHA insured loan, a homebuyer can make a down payment of as little as 3 percent. The FHA charges the borrower an upfront mortgage insurance premium fee, plus a monthly charge on all loans. See similar questions...

It is obtained by dividing the monthly debts by the gross monthly income. It is used to qualify borrowers on full doc and stated income programs. The front ratio is the total house payment (P.I.T.I.) divided by gross income, the back ratio adds other installment or revolving debt to the P.I.T.I. then divides by the gross income. See similar questions...

Answer: No. FHA was designed for first time homebuyers. It makes allowances for lower downpayments, higher ratios to qualify and offers other programs to help make housing more affordable. See similar questions...

Anyone who meets the credit requirements can afford the mortgage payments and cash investment, and who plans to use the mortgaged property as a primary residence may apply for an FHA-insured loan. See similar questions...

Yes. You can assume an existing FHA-insured loan, or, if you are the one deciding to sell, allow a buyer to assume yours. Assuming a loan can be very beneficial, since the process is streamlined and less expensive compared to that for a new loan. Also, assuming a loan can often result in a lower interest rate. The application process consists basically of a credit check and no property appraisal is required. And you must demonstrate that you have enough income to support the mortgage loan. See similar questions...