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The lender considers your debt vs income ratio (or, debt to income ratio) as part of their examination of you as a borrower.
The debt to income ratio is a comparison of your gross (pre-tax) income to your housing and non-housing expenses and debt obligations. Non-housing expenses would include such long-term debts as car or student loan payments, other installment debts, alimony, or child support.
According to the FHA guidelines, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with other non-housing expenses, should total no more than 41% of income.
The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.
You should be familiar with your ratio(s) so that when it come time to obtain a loan and the financing for your purchase, you are ready!
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