(2) Based on a 25% qualifying ratio for
monthly housing expense to gross monthly income with a 20% down payment.
For example, if you make $70,000 in gross income, your
monthly housing expense should not exceed $1,633 a month.
Being able to cut the
monthly housing expense allows more consumers to purchase now, she explains.
This provides low income homeowners with a means to repair their homes while not increasing their
monthly housing expense.
Typically, your
monthly housing expense should not be greater than 28% of your gross monthly.
Refinancing into a London interbank offered rate-based (LIBOR-based) ARM requiring interest-only payments cuts many homeowners'
monthly housing expense in half, adds Lake.
Freddie Mac's guideline is that the
monthly housing expense should not be greater than 25 percent to 28 percent of the borrower's stable monthly income.