How Much am I Allowed to Borrow?
More often than not, loan programs demand that your total debt be considerably less than 45% of your actual gross monthly income. And this percentage comprises the new mortgage payments, credit card, student loans, any car loans, and all other debts you have incurred. However, it doesn’t include expenses such as gym memberships, utilities, cable bills, and such.
But, Home Ready mortgage does have flexible debt when it comes to income guidelines. For those who have a good history of paying their bills on time, then you might qualify for relatively higher debt to income ratios of up to 50% of your income.
Also, you need to think personally about the amount of debt you can live with. You should take your time to decide how much debt you want to manage and whether it’s an amount you could one day pay off.