First-time Home Buyer Tips


Home Buying Guide

The important question that people often ask when starting the home buying process is, “What can I afford?”. Truly buying a home can be a daunting decision what with many factors to consider such as mortgage rates, income, monthly payments and many others.

At Loanbox Mortgage, we are committed to help you discover the best options that work within your budget and lifestyle. In that way you will not be rushed into making decisions, overextending your budget, or sacrificing what you want.


To help you understand better, we have provided more information below on how your debt-to-income ratio is computed. Your debt-to-income ratio includes your front-end and back-end ratios.


What’s a Debt-to-Income Ratio?



Your front-end ratio, also known as mortgage-to-income ratio, is a comparison of your gross monthly income and your projected housing expenses or mortgage payments:

Loanbox MortgageMortgage payment

Loanbox MortgageProperty Taxes

Loanbox MortgageHomeowner’s Insurance

Loanbox MortgageHOA Dues and/or PMI

The Front End Ratio should typically not exceed 38 to 45% of your gross monthly income. For example, if your average monthly income is $10,000, your total mortgage, taxes and insurance payment should be between $3,800 and $4,500.



Your back end ratio will include your front end payment plus other monthly payments you’re obligated to pay such as credit card payments, child support and other loan payments.

Loanbox MortgageMonthly Car Payments

Loanbox MortgageMin Credit Card Payments

Loanbox MortgageStudent Loans

Loanbox MortgageAlimony

Loanbox MortgageChild Support and more

The Back End Ratio should typically not exceed 45 to 55% of your gross monthly income. For example, if your average monthly income is $10,000, your total back end, which includes your mortgage payment, should be between $4,500 and $5,500.

What Can I Afford?


Get started by using our Home Affordability Calculator. Our online calculator will help you check what you are fully prepared to spend for your own home. If you have other questions, you are welcome to call us.