Debt-to-Income Ratio

	Searching for a loan? We'd be thrilled to talk about our mortgage offerings! Give us a call at (972) 292-0448. Ready to begin? Apply Here.

Lenders use a ratio called "debt to income" to determine your maximum monthly payment after you have paid your other monthly debts.

About your qualifying ratio

In general, conventional mortgages require a qualifying ratio of 28/36. An FHA loan will usually allow for a higher debt load, reflected in a higher (29/41) qualifying ratio.

For these ratios, the first number is the percentage of your gross monthly income that can be spent on housing costs. This ratio is figured on your total payment, including hazard insurance, homeowners' dues, PMI - everything.

The second number in the ratio is the maximum percentage of your gross monthly income that should be spent on housing costs and recurring debt. Recurring debt includes auto/boat payments, child support and credit card payments.

For example:

28/36 (Conventional)

• Gross monthly income of $2,700 x .28 = $756 can be applied to housing
• Gross monthly income of $2,700 x .36 = $972 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

• Gross monthly income of $2,700 x .29 = $783 can be applied to housing
• Gross monthly income of $2,700 x .41 = $1,107 can be applied to recurring debt plus housing expenses

If you want to run your own numbers, we offer a Mortgage Qualifying Calculator.

Just Guidelines

Remember these ratios are just guidelines. We'd be happy to help you pre-qualify to help you figure out how large a mortgage you can afford.

At Jeff White Lending, we answer questions about qualifying all the time. Give us a call at (972) 292-0448.