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In home mortgage lending, it is common for lenders to specify a maximum housing cost (PITI) ratio of 28% to 33% of monthly gross income.
| In home mortgage lending, it is common for lenders to specify a maximum housing cost (PITI) ratio of 28% to 33% of monthly gross income. Assume a housing cost ratio of 30% and the borrower qualification data below. | |
| House Price | 400,000 |
| Down Payment 5% | (20,000) |
| Loan Amount | 380,000 |
| Loan Payment 6.50% | 2,402 |
| Taxes | 400 |
| Insurance | 133 |
| Monthly Housing Cost | 2,935 |
| Monthly Income Required | 9,784 |
| What DCR is the lender effectively applying to the borrower? | |
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The Commercial Aircraft Finance Handbook
Authors: Ronald Scheinberg
2nd Edition
1138558990, 978-1138558991
