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.
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NMLS Consumer Access:
Illinois Residential Mortgage Licensee
1475 E Woodfield Rd, Suite 110
Schaumburg, Illinois 60173
Phone: (847) 517-1700
Toll Free (877) 232-0619
4043 N. Ravenswood, Suite 201
Chicago, Illinois 60613
Phone: (773) 388-0645