Typically, lenders will allow a total housing payment (which includes principal and interest, taxes and insurance) of 28% of the household's total monthly income.
The second part of this equation is your debt-to-income ratio. This means your total monthly debt (your new housing payment, credit cards, car payments, student loans, etc.) divided by your total household income. Lenders usually like to see that somewhere between 38% and 40%.
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