To close on the house you'll have to have enough money for monthly mortgage payments.
When a lender calculates how much a $150,000 mortgage, for example, will cost a borrower each month, she won't just look at the mortgage payment. The amount that matters, Investopedia states, is "PITI"--payments on your mortgage principal; your interest; your property taxes; and your homeowners and possibly mortgage insurance. Comparing that to your monthly income shows how much mortgage you can afford.
Most lenders want your PITI to equal no more than 28 percent of your monthly income, though some will go up as high as 40 percent, according to Investopedia. If the ratio is too high, lenders fear it will be harder for you to make ends meet and pay the mortgage. Lenders will also look at your debt-to-income ratio, the percentage of your monthly income
taken up by credit card bills, student loans, child-custody payments and your PITI. The standard guideline is that the total debts shouldn't be more than 36 percent of your income.
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