Mortgage underwriters typically approve loans when the total house debt (principal, interest, taxes, insurance, condo fee if applicable) amount to 33% of your gross or less. Total debt for the applicants (housing, car payments, credit cards, cell phone Etc.) should not exceed 42% of the gross monthly income.
Like everything in life, there are exceptions. Excellent credit scores and a substantial down payment can help to push the limits higher. When two people apply, the lower credit score of the two people drives the approval process. Many times people need the income of the lower person to qualify but the low credit score sinks the deal.
Even after a loan is approved the lender runs a final credit report 24 to 48 hours before the closing. So, don't get approved for a mortgage and then finance a new car before the closing if your numbers are close!
|