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What are Housing and Total Debt ratios?

debt HOUSING ratios total
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What are Housing and Total Debt ratios?

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The Housing Ratio is your total monthly housing expense (principal, interest, taxes, hazard insurance, and mortgage insurance, if applicable) divided by your gross monthly income (before taxes). The Total Debt Ratio is your total monthly housing expense PLUS any recurring debts (i.e. monthly credit card minimum payment, car payments, or other loan payments) divided by your income. Standard underwriting guidelines suggest a maximum of 28% on the Housing Ratio and 36% on the Total Debt Ratio, but these ratios can vary based on the loan program, the financial strength of the borrower and the down payment.

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