|FHA Mortgage Lenders – Debt Ratio’s Guidelines|
|In addition to your income, an FHA lender will look at your minimum monthly debts to calculate your income to debt ratios. The debt ratio’s is what will determine “how much” of a FHA loan you can afford to qualify for.Following are the two types of debt ratio’s that will be use:
Following is the typical debts used to determine your qualifying ratio’s:
The percentage of debts to income is called the debt-to-income (a.k.a.: back-end) ratios. A good goal is to spend no more than 38% of your income on all debts, including house payment. However, under FHA home loan guidelines you’re allowed to spend up to 41% of your monthly income on housing and other debts — if the rest of your loan application shows you can handle it.
An example of the income to debt calculation is as follows:
These ratios can also adjusted or exceeded if there are item(s) you can payoff, lower interest the interest rate, lower the loan amount, etc.
FHA is the most flexible lender regarding debt ratio’s. Never rule yourself out of buying a home until you have spoken to a mortgage professional.
Learn exactly how much of a FHA loan you can qualify for by clicking Here.