The lender adds up the monthly payments that show on your credit report, such as cards, car loans and student loans, plus the new housing payment, and compares the total with your income before taxes.
Why it matters
It tells the lender how much room your budget has. Each loan program has its own limits, and paying down a debt or adding documented income can change the picture.
Where you meet it
From the first conversation with a lender through underwriting. It is also worth knowing for yourself: what a lender allows and what feels comfortable are not always the same.
Questions about your loan?
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