PITI is typically quoted on a monthly basis and compared to a borrower's monthly gross income by means of computing the individual's front-end and back-end ratios, which are used to approve mortgage loans.Generally, mortgage lenders prefer PITI to be equal to, or less than 28%, of a borrower's gross monthly income.

Example:If the lender requires a debt-to-income ratio of 28/36, then to qualify a borrower for a mortgage, the lender would go through the following process to determine what expense levels they would accept:

Using Yearly Figures:

Gross Income of $45,000

$45,000 x .28 = $12,600 ($1,050 per month) allowed for housing expenses, which would include theprincipal payment, interest,taxesand insurance.

$45,000 x .36 = $16,200 ($1,350 per month) allowed for housing expense plus recurring debt. The recurring debt would be such things asstudent loan payments, revolving credit payments, and car payments.

Using Monthly Figures:

Gross Income of $3,750 ($45,000/12)

$3,750 x .28 = $1,050 allowed for housing expense (PITI)

$3,750 x .36 = $1,350 allowed for housing expense (PITI) plus recurring debt.

Do you consider such guidelines too restrictive for an individual to be able to qualify for a mortgage?Explain fully your rationale for your stated position. (You may want to calculate your overall "PTIT" percentages.)