Calculate your DTI to understand your mortgage eligibility
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Book a DemoFor mortgage approval, lenders typically prefer a front-end DTI (housing costs) of 28% or less and a back-end DTI (total debts) of 36% or less. Some loan programs allow higher ratios: FHA up to 43%, VA up to 41%, and some conventional loans up to 50% with strong compensating factors like excellent credit or significant cash reserves.
DTI is calculated by dividing your total monthly debt payments by your gross monthly income, then multiplying by 100. For example, if you earn $6,000/month and have $2,000 in monthly debt payments, your DTI is 33% ($2,000 / $6,000 x 100).
DTI includes: mortgage/rent payments, car loans, student loans, credit card minimum payments, personal loans, child support, and alimony. It does not include utilities, insurance premiums (unless escrowed), groceries, or other living expenses.
Front-end DTI (also called housing ratio) includes only housing costs (mortgage principal, interest, taxes, insurance, and HOA). Back-end DTI includes housing costs plus all other monthly debt obligations. Lenders look at both ratios when evaluating loan applications.
Yes, but it depends on the loan type and your overall financial profile. FHA loans allow up to 43% DTI (sometimes higher with compensating factors). Some lenders offer conventional loans up to 50% DTI for borrowers with excellent credit, strong reserves, or other positive factors.