Things You'll Need
Determine your average monthly income. If your pay is not equal each month, take the total off your payments for the past year and divide by 12. For example, if your total income was $48,000, you average monthly income would be $4,000.
Multiply your monthly income by 28 percent if you are considering a conventional mortgage and 29 percent if you are considering an FHA mortgage to determining the maximum monthly payment you will qualify for. For example, if your monthly income is $4,000, you would likely only qualify for a mortgage with a monthly payment of $1,120 if you were looking at a conventional mortgage.
Determine the total minimum payments of all other on-going debt obligations besides your mortgage, such as student loans, car loans and child support payments. If you have debts that will be retired within nine months, do not
count them towards this limit.
Multiply your monthly income by 36 percent if you are considering a conventional mortgage and 41 percent if you are considering an FHA mortgage to determining the maximum debt obligations lenders will let you have, including your monthly mortgage payment. Then subtract the total of your other debt obligations from step 3. For example, if you are applying for a conventional loan and have a monthly income of $4,000, the most your total debt obligations could be would be $1,440. If you had $280 in other debt obligations, the most that would be left for your mortgage payment would be $1,160.
Take the smaller of the two amounts from Sep 2 and Step 4. This is your maximum monthly payment. For example, since $1,160 is less than $1,120, the maximum mortgage payment for you, if your monthly income was $4,000, would be $1,160.