# How Much FHA Loan Can I Qualify For?

If you’re wondering how much FHA loan you can qualify for, you’re not alone. Many borrowers want to know what the maximum loan amount is that they can qualify for, and it’s important to understand the factors that go into determining this. Keep reading to learn more.

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## How Much Can I Borrow?

Figuring out how much FHA loan you can qualify for is something you can do on your own by using an online debt-to-income ratio calculator. You can also get a good idea of how much you can borrow by speaking with a lender and providing them with information about your income, debts, and other factors. Keep reading to find out more about how to calculate your FHA loan limit.

### How Much House Can I Afford?

The amount of house you can afford directly relates to how much money you can borrow and is determined by your debt-to-income ratio, or DTI. Knowing your DTI is the first step in deciding how much house you can afford—because it’s the amount that lenders will look at when considering a home loan.

For example, let’s say your monthly debts include:
\$1,000 per month for car payments
\$500 per month for credit card payments
\$300 per month for student loans
\$250 per month for other debts
This totals \$2,050 in monthly debt obligations. If your gross monthly income is \$6,000, then yourDTI would be \$2,050/\$6,000, or 34%. (Anything over 43% is considered too high by most lenders.) This means that even though you technically could afford a \$1,200 monthly mortgage payment (\$6,000 x 0.34 = \$2,040), lenders might not give you a loan with payments that high because they consider this too risky.

### How Much Income Do I Need?

In order to qualify for an FHA loan, you must have a Debt-to-Income (DTI) ratio of 50% or less. This means that your monthly mortgage payments (including taxes and insurance) can’t be more than 50% of your monthly pre-tax income.

To calculate your DTI, simply divide your monthly debts by your monthly income. For example, if your monthly income is \$3,000 and you have \$300 in monthly debts, your DTI would be 10%.

In order to qualify for an FHA loan with a DTI of 50%, you’ll need a credit score of 580 or higher. If you have aDTI of 43% or lower, you can still qualify for an FHA loan, but you’ll need a credit score of 640 or higher.

## How Much Debt Can I Have?

Your debt-to-income (DTI) ratio is one factor that determines whether you qualify for a loan. It also plays a role in how much you can borrow.

### Front-End Ratio

The front-end ratio is also known as the housing ratio. This is a comparison of your monthly housing costs to your monthly income. Your monthly housing costs include your mortgage payment, property taxes, and any insurance or condo fees (if applicable). The maximum front-end ratio allowed is 31%. This means that your monthly housing costs (mortgage payment, property taxes, and insurance) can be no more than 31% of your gross monthly income.

### Back-End Ratio

The “back-end” ratio is a different story. This ratio includes all of your monthly debt obligations, including your housing payments, car loans, credit card payments, student loans, etc. Lenders typically like to see a back-end ratio that’s 36% or lower. The lower your back-end ratio, the better chance you have of qualifying for a loan.

## How Much Can I Qualify For?

FHA loans are a popular choice for first-time homebuyers because they allow for a lower down payment and credit score requirements. But how much can you actually qualify for? This all depends on your income, employment history, debts, and other factors.

### Down Payment

The amount of your down payment is important because it will affect how much you will need to finance and what size monthly mortgage payment you can afford. A larger down payment may give you a lower interest rate and could mean a shorter repayment term. If you have at least 10% to put down, you can qualify for an conventional loan, but you may pay private mortgage insurance (PMI) if your down payment is less than 20%. With an FHA loan, the minimum down payment is 3.5%.

You can use our mortgage affordability calculator to see how much house you can afford with different down payment amounts.

### Mortgage Insurance

Mortgage insurance is required on all FHA loans unless 20% equity already exists in the home at the time of the loan funding. Otherwise, borrowers must wait for the loan balance to achieve 22% equity to cancel their mortgage insurance. The annual premium is divided into 12 monthly installments and added to your mortgage payment.

### Mortgage Rate

The mortgage rate is the interest rate that the lender uses to calculate your monthly mortgage payment. This rate is determined by the individual characteristics of your loan and can be either fixed or adjustable. The most common mortgage rates are:

-Fixed: A fixed mortgage rate means that your interest rate will stay the same for the life of your loan, no matter what happens in the housing market or in the economy as a whole. Fixed rates are most commonly used for 30-year mortgages, but they can also be used for other terms, such as 20-year or 15-year loans.
-Adjustable: An adjustable mortgage rate (ARM) means that your interest rate will change at regular intervals during the life of your loan. The most common adjustment period is every year, but some ARMs adjust every six months or even monthly. Adjustable rates are usually lower than fixed rates when you first get your loan, but they can go up or down over time, depending on economic conditions.