when calculating the housing expense ratio an underwriter will total all housing expense obligations of a borrower including the potential mortgage principal and interest payments property taxes hazard insurance mortgage insurance and association fees 
the sum of the housing expenses is then divided by your pre tax income to arrive at the housing expense ratio the housing expense ratio can be calculated using monthly payments or annual payments the housing expense ratio threshold for mortgage loan approvals is typically 28 although it varies by lender 3debt to income is also another critical component of loan approval when you are considered for a mortgage loan a credit issuer will get the average amount of money you pay to creditors every month through your credit report then the total about of debt you payments you make is divided by your monthly income generally you must have a debt to income ratio of 36 or less for loan approval but it may be as high as 45 if you have good credit 4mortgage underwriters will consider the potential stress that a mortgage payment will add to your finances and overall debt 