What are the maximum qualifying ratios for potential FHA borrowers?

The maximum qualifying ratios for potential FHA borrowers are indeed 31% for the mortgage payment to Effective Income Calculation (EIC) and 43% for the total fixed payment. These ratios are important because they help lenders assess the borrower's ability to repay the mortgage. The 31% ratio refers specifically to the share of the borrower's gross income that can be allocated to housing costs, including the mortgage payment, property taxes, and insurance. Meanwhile, the 43% ratio includes all fixed monthly debts, allowing lenders to take into account automobile loans, credit card payments, and other significant financial obligations. These thresholds are designed to ensure that borrowers do not become financially overextended, maintaining a balance between borrowing capacity and what the borrower can reasonably afford.