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Monthly mortgage payments (PITI) should not exceed 28% of gross income is a rule of thumb that lenders use to approve mortgage loans. Andre and Rainbow Johnson gross annual income of $53, 400. They want to buy a house for $150,000 and make a down payment of $15,000. The monthly payments principal and interest for a 15-year mortgage will be $1, 020. On 30-year mortgage, the payment will be $860. Their property taxes will be $3, 660 per year and insurance will run $840 per year. Use the rule of thumb to determine if they will be approved for one, both, or neither loan.