What percentage of income does the lender's rule of thumb suggest for PITI?

The lender's rule of thumb for PITI (Principal, Interest, Taxes, and Insurance) suggests that no more than 28% of a borrower's gross monthly income should be allocated to housing expenses. This guideline is established to help borrowers maintain a manageable level of debt while ensuring they can meet other financial obligations and living expenses. By recommending that borrowers keep their PITI payments at or below this percentage, lenders aim to reduce the risk of foreclosure and ensure that borrowers can comfortably afford their mortgages while still having funds available for savings, investments, and other necessary expenditures. This percentage has become a common benchmark in the lending industry, reflecting a prudent approach to housing affordability and financial stability.