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Qualifying Ratios As part of the qualifying process, the lender will use ratio calculations to determine whether you have adequate stable income to support the monthly mortgage payments.  These calculations are often referred to as debt-to-income ratios.  There are two ratio calculations performed by the lender:  one to determine the housing debt to income ratio and the total monthly debt to income ratio.  To demonstrate adequate monthly income to support the mortgage payment, qualifying top/front ratios (housing to income) will range from a maximum of 28% to 31%.  To demonstrate your ability to pay your mortgage and other recurring monthly obligations, qualifying bottom/back ratios (total debt to income) will range from a maximum of 38% to 43%.

To compute the housing expense ratio (top/front), the lender will divide the PITI by the gross monthly income.  To compute the total monthly debt ratio (bottom/back), the lender will divide the total monthly debt including the PITI by your gross monthly income.

Using the Debt and Income Worksheet, and a proposed monthly mortgage payment to compute your debt to income ratios.

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