Lenders also take into consideration your regular monthly debts and obligations: other real estate loans, installment loans (bank loans, auto loans, tuition loans, etc), revolving accounts, alimony and child support. Your housing expenses plus long-term debts should not be more than 33 percent to 36 percent of your gross monthly income. For Federal Housing Administration (FHA) loans, this figure should not to exceed 41 percent of the homebuyer's gross monthly income. Lenders usually define long-term debt as monthly expenses extending more than 10 months into the future.
It is recommended that you pay-off as much debt as possible before you apply for a mortgage.
Having the idea of what monthly mortgage payments you can afford will help you in determining the maximum loan amount you can borrow. With our Mortgage Calculators you can determine the maximum mortgage amount for loan terms you desire.
Having the idea of what monthly mortgage payments you can afford will also help you decide the right kind of mortgage for you. For example, a 15-year fixed-rate mortgage requires higher monthly payments than a 30-year loan.
