How to Calculate the Maximum PITI for an FHA Loan

Estimate your maximum monthly PITI in a few quick steps.

Estimate your maximum monthly PITI in a few quick steps.

The Federal Housing Administration makes it easier to purchase a home by guaranteeing loans for individuals who have difficulty coming up with a standard 20 percent down payment. Most FHA borrowers have good credit, but earn low to moderate incomes. A minimum down payment of 3 percent is required and most closing costs can be built into your loan. Your mortgage lender uses information from your loan application to determine the maximum principal, interest, tax and insurance payment, or PITI, the FHA will allow for your loan.

Calculate your monthly income. This includes wages, bonuses, commissions and other sources of income, such as child support, alimony and self-employment profits. You might not receive all sources of income on a monthly basis. If this is the case, divide the amount you received last year by 12 to determine a monthly average. Multiply your monthly income by .28.

Calculate your monthly liabilities. This includes auto loans, credit card and student loan payments, and child support or alimony payments you make. Multiply your monthly income by .36 and subtract your monthly liabilities.

Look at the results from each calculation. The lowest result equals your maximum PITI for an FHA loan.

Tips

  • If you and your spouse are applying jointly for the loan, combine both of your incomes and liabilities before applying the percentages in Steps 1 and 2.
  • Other factors can determine your final maximum PITI, such as the property taxes for the home you want to purchase and your monthly mortgage insurance premium. Your mortgage lender will discuss your final maximum amount with you.

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