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Debt-to-Income Ratio

Banks use this number to approve you. Find out yours now.

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Monthly Debts

How It Works: Calculates your Debt-to-Income (DTI) ratio, a key metric banks use for loan approval.

Key Inputs:
  • Income: Gross monthly income (before tax).
  • Monthly Debts: Rent/Mortgage, Car, Student Loans, and Credit Card minimums.


Formula: DTI = (Total Monthly Debt / Gross Monthly Income) × 100.
DTI Ratio
36.6%
Approval Status
Good
Below 43% recommended limit
Lending Standards:
< 36%: Excellent (Easy Approval)
36% - 43%: Good (Likely Approval)
> 43%: Risky (Difficult Approval)

Mastering Your Debt-to-Income (DTI) Ratio

Your credit score isn't the only number banks care about. Your Debt-to-Income Ratio (DTI) tells lenders if you can actually afford a new monthly payment.

Front-End vs. Back-End Ratios

The 43% Rule

For most Qualified Mortgages (QM), your back-end DTI cannot exceed 43%. If it's higher, you likely won't qualify for a standard mortgage, regardless of your credit score.

How to Lower Your DTI

1. Increase Income: Ask for a raise or start a side hustle.
2. Pay Down Existing Debt: Use the snowball or avalanche method to eliminate monthly obligations.
3. Avoid New Debts: Don't finance a new car before applying for a mortgage.