Part of the mortgage application process will be the determination of how much house you can afford based on your income. The two ratios that will be computed are the front ratio and the back ratio. Front Ratio: The total mortgage payment including principal, interest, taxes, and insurance (PITI) as well as any condominium or homeowner association fees divided by your total GROSS income. Example: With a gross income of $3,700 per month and a PITI of $973, the front ratio would be 26%. Back Ratio: The total mortgage payment PLUS any car payments, credit card, and other loan payments, divided by your total GROSS income. Example: With a gross income of $3,700 per month, a total mortgage payment of $973, a car payment of $212, one credit card payment of $59, and one credit card payment of $43, for a total of $1,287, the back ratio would be 35%. The loan program in addition to compensating factors will dictate the maximum allowances for both the Front and Back Ratio in accordance to underwriting industry standards, so contact your Interstate Loan Officer to find out exactly how much you can qualify for TODAY.