How Much Mortgage Can You Qualify For?
If you want to estimate how much of a mortgage you can handle, take your gross monthly income (before taxes and other deductions) and multiply it by 28% or 0.28. For example, if you make $3200 a month, take 28% of that ($3200 times 0.28) and you get $896. That's just an approximation of how much your mortgage can be.

Mortgage companies use qualifying ratios to determine the largest mortgage you can afford. Most mortgage companies use a 28/36 ratio. The first number is the percentage of your gross income that the lender would consider acceptable as a monthly mortgage payment, as you saw in the paragraph above.

The second number is used to figure your total indebtedness limit. All your monthly debt payments, including your mortgage, car loans, and credit cards, should not exceed 36% of your gross monthly income. For example, if you make $3200 monthly, your indebtedness, including the mortgage, should not exceed $1152 ($3200 times 0.36).

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