How to Calculate a 29/41 Qualifying Ratio for a Mortgage Loan

Calculate your monthly income. Divide your annual before-tax pay by 12 months. For example, if you gross $48,000 per year, your monthly gross income will be $4,000 ($48,000 divided by 12). Add one-twelfth of the annual interest you receive from savings or investments, rent, annuities and disability payments paid to you. If you work for yourself, figure your monthly pre-tax profits. Include in your income one-twelfth of the annual child support and alimony payments you receive if you expect it to last three years and you have collected these payments within 12 months of your loan application.

Multiply your monthly gross income by 29 percent to arrive at the maximum mortgage payment you can afford; the mortgage payment consists of principal and interest as well as insurance and property taxes if the lender requires an escrow account for such.

Multiply your monthly gross income by 41 percent to calculate your back-end ratio. The back-end ratio is the maximum percentage of your gross monthly income that can be applied to your total debt payments under a 29/41 loan. This debt includes your mortgage plus all your other debts such as car and student loans, alimony and child support payments, credit card payments and other monthly obligations including the mortgage, you can afford. Alternatively, to see if you can afford a particular payment, divide the total of your mortgage and other debt payments by your monthly gross income to see if the quotient is greater than 41 percent.