The basic formula
Divide the applicable monthly debts by qualifying gross monthly income, then multiply by 100. For example, $2,650 divided by $6,200 equals about 42.7%.
Credit and Income
What is DTI?
Debt-to-income ratio compares qualifying monthly debt obligations with qualifying gross monthly income. It is one important part of the mortgage decision, not the entire decision.
Debts commonly included
The proposed housing payment, car loans, credit cards, student loans, support obligations, and other recurring debts may count under program rules.
Not every bill is DTI debt
Utilities, groceries, phone bills, and other living expenses are generally not entered into the formal DTI calculation, although they still matter to your real budget.
Higher does not mean hopeless
Program, credit, reserves, down payment, residual income, and automated underwriting results can change what is possible. Comfortable payment still matters more than maximum approval.
Written by Marta Lillard
25+ years of mortgage experience, explained in plain English.
Mortgage Broker · First Coast Mortgage Funding · NMLS #879436 · Licensed in Florida and Georgia
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