Debt-to-Income Ratio (DTI)

Your debt-to-income ratio is the single most important approval metric after your credit score. It is simple math, and you can control it.

How to calculate it

Add up all your monthly debt payments — future mortgage PITI, car loans, student loans, minimum credit-card payments — and divide by your gross monthly income. Multiply by 100 for a percentage.

The numbers lenders want

• Front-end (housing only): 28% or less.
• Back-end (all debt): 36% or less, though some programs allow 43-50%.

How to improve it

Pay down credit cards first — they are the most expensive and the easiest to shrink. Paying off a car loan just before buying frees up a large monthly obligation. And do not buy a bigger house than you need.

Why it matters

A low DTI gets you approved, a better rate, and a payment that does not keep you up at night. Model your target payment on our calculator and keep it under 28% of income.