Payment shock is a risk layer for underwriters to consider when the principal, interest, taxes, and insurance (PITI) ratio exceeds 29% and the proposed mortgage payment is 100% or greater than current housing expense or the applicant has no history of housing expense.

                                                    Calculation: 

Proposed PITI ÷ Current Housing Expense - 1 =____x 100 = Payment Shock %

Payment shock is not a risk layer if the PITI ratio is 29% or below.