Should I include HOA fees with 28% mortgage ratio, or the 36% debt-to-income ratio?

**Journeyman** · 01-12-2009, 05:18 PM

Hello.

I am looking at a condo to buy soon, and I am trying to get a general idea on what I can afford. The condo I'm looking at has a $180 monthly HOA fee. So when I crunch the numbers into the mortgage calculators, do I include HOA in with my housing payment, or do I include it with my monthly debt? Because I'm looking at Yahoo Finance's mortgage calculator, and it places HOA fees with debt, but when I read other websites, they factor in HOA with the 28%mortgage-to-income ratio. Does it matter to realtors? Because I do not make that much money and HOA fees being included in the 36% debt-to-income ratio would provide me with a nice larger loan size. thx

**donrock** · 01-12-2009, 06:18 PM

The 28% mortgage ratio should include principal, interest, taxes, insurance, PMI and HOA. This is what the underwriter will use to figure your ratio.

Don't go by what the realtor says but what the lender says. Don't try to cheat on these figures because you will get caught by the underwriter and it will not only cost you time but maybe your deal.
Good luck,
donrock

**Journeyman** · 01-12-2009, 06:31 PM

Thank you. That would mean that the condo I'm looking at would have a front-end mortgage ratio of 33-35%, seems too high. But I also have zero debt, so the back-end ratio would be exactly the same at the front-end ratio (33-35%). I've read that lenders usually focus more on the debt-to-income ratio and base their loans from that, unless the front-end ratio is way high. Just wondering if I still have good odds of getting a loan (would be about a $60k loan). I don't make much money so this is a starter house, and I should be talking to a lender right now, but right now I'm just getting a general idea. thx

**hotrealtyleads.org** · 01-13-2009, 08:15 PM

I agree with donrock. You should go by what your lender says, more than what a website is telling you. I think that half the time getting the right loan officer that knows the programs that you qualify for is more important than anything else. So that's where I would start.

**Greg** · 01-14-2009, 05:42 AM

Put your calculator down and pick up the phone and call up some mortgage brokers and lenders. You are gong to have to do it eventually and waiting is not in your best interest. Talk to the experts.

**danasindianapolisiindiana** · 06-03-2010, 01:01 PM

Your HOA fees would go on your front end ratio.

**florida real estate** · 06-04-2010, 02:44 AM

Yes.. HOA fees should be included..

When buying a condominium, HOA fees, as well as the position of special assessments, need to be factored into the purchase price and current cost of living. Make it a point to review existing financial information for the building, including reserve fund levels, and special evaluation information, when buying a condo.

**normanc** · 06-06-2010, 10:38 PM

There's a lot of ideas in here. I hope you can buy a comfortable units you wanted.

**amasters** · 06-08-2010, 02:21 PM

You need to include ALL monthly housing expenses in the mortgage ratios--except, of course, things like electricity, maintenance and that kind of stuff.