Calculations that are used in determining whether a borrower can qualify for a mortgage. They consist of two separate calculations: a housing expense as a percent of income ratio and total debt obligations as a percent of income ratio.

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There are two main elements lenders consider when determining whether you and any co-borrowers qualify for a specific mortgage.

The first is your monthly mortgage costs, including mortgage payments, property taxes and insurance. If you're considering buying a condominium or cooperative, any associated fees are also considered. Your mortgage costs should not exceed 28 percent of your gross monthly (pre-tax) income.

The second qualifying guideline relates to your total monthly housing costs and other debts you and any co-borrowers have. These costs should not exceed 36 percent of your gross monthly income.

Lenders follow these guidelines because they believe these percentages allow homeowners to pay off their mortgages fairly comfortably without the worry of loan defaults and foreclosures.

However, these guidelines can be exceeded in certain cases, such as borrowers with a good credit history or with a larger down payment.