Ratio of Debt to Income

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Lenders use a ratio called "debt to income" (DTI) to determine the most you can pay monthly after you have paid your other monthly loans.

About the qualifying ratio

Starndard underwriting for conventional loans requires a qualifying ratios of 28/36. Per current "Ability to Repay" guidelines the maximum total DTI = 43%.  

The first number in a qualifying ratio is the maximum percentage of gross monthly income that can be applied to housing (including principal and interest, PMI, hazard insurance, property tax, and HOA dues).

The second number in the ratio is the maximum percentage of your gross monthly income that can be applied to housing costs and recurring debt. Recurring debt includes things like car payments, child support and monthly credit card payments.

Some example data:

A 28/36 ratio

  • Gross monthly income of $8,000 x .28 = $2,240 can be applied to housing
  • Gross monthly income of $8,000 x .36 = $2,280 can be applied to recurring debt plus housing expenses

If you'd like to run your own numbers, we offer a Mortgage Loan Pre-Qualification Calculator.

Remember these ratios are only guidelines. We'd be happy to help you pre-qualify to help you figure out how much you can afford. At Main Street Mortgage Company, we answer questions about qualifying all the time. Give us a call at (713) 528-1245.

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