Whenever financing a home or refinancing a home, your mortgage should not account for more than 28% of your income. The ration is called HTI (Home to Income). It looks like this:
- Total Income/PITIA (Principle, Interest, Taxes, Insurance, Association dues) = %
Total income may include wages, self employment income, child support, alimony, certain types of government assistance, pension, annuity income, retirement, etc..
The housing portion is Principle, Interest, Taxes (county, school, local or state), Insurance (property, flood, wind, earthquake riders), and Association (HOA or Property if a condo).
The ideal number at the end is 28% or lower.
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