Your monthly housing costs should not exceed 47% of your gross monthly income for a FHA Loan. Total housing costs often lumped together are referred to as PITI.
P = Principal
I = Interest
T = Taxes
I = Insurance
Examples:
Monthly Income x .47 = Maximum PITI
$3,000 x .47 = $1,410 Maximum PITI
Your total monthly costs, or debt to income (DTI) adding PITI and long-term debt like car loans or credit cards, should not exceed 57% of your gross monthly income.
Monthly Income x .57 = Maximum Total Monthly Costs
$3,000 x .57 = $1,710
$1,710 total - $1,410 PITI = $300 Allowed for Monthly Long Term Debt
FHA Loan ratios are more lenient than a typical conventional loan.
Loan Program | Rate | APR |
30 Year Fixed | 4.500% | 4.521% |
15 Year Fixed | 4.000% | 4.012% |
3/1 Arm | 4.000% | 3.934% |
5/1 Arm | 4.125% | 3.956% |
7/1 Arm | 4.250% | 3.982% |