2006-06-06 11:14:58 · 5 answers · asked by gauravsa 2 in Business & Finance ➔ Renting & Real Estate
This might help some I don't know. It has to do with loans.
Understanding the qualifying ratio
Typically conventional loans have a qualifying ratio of 28/36. Usually an FHA loan will allow for a higher debt load, reflected in a higher (29/41) qualifying ratio.
The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to housing (including loan principal and interest, private mortgage insurance, hazard insurance, property taxes and homeowner's association dues).
The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes things like car loans, child support and monthly credit card payments.
For example:
With a 28/36 qualifying ratio:
Gross monthly income of $3,500 x .28 = $980 can be applied to housing
Gross monthly income of $3,500 x .36 = $1,260 can be applied to recurring debt plus housing expenses
With a 29/41 qualifying ratio:
Gross monthly income of $3,500 x .29 = $1,015 can be applied to housing
Gross monthly income of $3,500 x .41 = $1,435 can be applied to recurring debt plus housing expenses
2006-06-06 11:27:22 · answer #1 · answered by Sancira 7 · 0⤊ 0⤋
Look at it as a homeowner. Most cases you can not exceed a 50% debt to income ratio. Meaning that adding up all of your monthly payments (credit cards, rent, car payment, etc.). You should not exceed 50% of what your monthly income is. If you can stay much lower than that then do it. Don't shoot for something more expensive just because you have the extra cash flow. Go for whatever you can be comfortable with, don't get yourself in a bind.
2006-06-06 11:22:38 · answer #2 · answered by First Integrity 1 · 0⤊ 0⤋
Credit Bureaus recommend no more than 20-30 %, after that, your income to expense ratio really drops, thus your "credit worthiness" also drops. If you cannot pay rent with only one check, work on small things first, then build up.
2006-06-06 11:27:50 · answer #3 · answered by Jim M 3 · 0⤊ 0⤋
Rent is different and i do not know your age, however, my statement on this would be no more than 1/3 of it. It CAN be done. For I have done it and even better ~ wish you the best.....Thank You!
2006-06-06 11:39:56 · answer #4 · answered by Anonymous · 0⤊ 0⤋
set up the cheap itemizing your earnings and expenditures. which would be your handbook to what you are able to locate the money for. in many circumstances the greater you pay in lease/loan the less you have for different issues.
2016-12-08 17:52:31 · answer #5 · answered by ? 4 · 0⤊ 0⤋