Salary

Lenders will only count 45% of your income to qualify you for a loan. So if you make 50k yr, thats $4,166 a month, @ 45% thats $1,874, which is the max TOTAL debt your lender will allow you to have. Assuming you have a credit card payment of $100, taxes are 250, insurance is 50 that leaves $1,474 for Principal and Interest on a mortgage. Max loan amount you would qualify for is 275k

???????

Not getting this.

I didn't quite understand the question being asked, so I posted a general example on a persons income, and how a Underwriter would calculate the income. Take your income, and plug in your pieces to the puzzle...Your monthly gross income, your debt payment, what your local taxes and insurance in your area runs, and divide your total payment, by your income...For a loan to be approved, you must have a Ratio less than 50%...45% is ideal....(this was an example to help a borrower understand how a lender will qualify a person for a loan.)

Thank you so much for the information.

I think we have found that in recent years, a 45% back ratio isn't going to work for the majority of borrowers, whose credit scores don't necessarily break the 700 barrier.

When ratios are that high, it's advisable to have pristine credit - not so likely anymore when there's lots of debt.

Frankly, I'd stick to the old formula of 28/36 for ratios, based on gross monthly income. Lenders have retreated from the heyday of exceptionally high debt ratios.

there is no minimum income.

you just have to have good debt to income ratios