Homeowner Association Dues Affects Your Debt to Income Ratio

When considering a property and you've gone through the pre-approval* process to know what your estimated max allowed mortgage is, understand that any monthly commitments have to be included as part of your overall debt-to-income ratio that includes all monthly debts and income.

When you are told your max loan is, as an example, $900/mo, you need to understand that this amount would include any HOA dues. If you are looking at a condo that is $900/mo plus $150 in HOA dues, and your max estimated monthly mortgage needs to be $900/mo or less, then you'd be significantly over and likely wouldn't qualify.

Understanding this and working with a lower qualified mortgage allowance, HOA dues and fees may significantly affect what you can buy. In my example above, I'd have to lower your total allowed mortgage to fit you in guidelines to get you down to a $750/mo mortgage to account for your $150/mo HOA dues.

* Pre-approval is based on a preliminary review of credit information provided to Guild Mortgage which has not been reviewed by Underwriting. Final loan approval is subject to a full Underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.