Ratio of Debt to Income

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


About the qualifying ratio

Usually, conventional mortgage loans need a qualifying ratio of 28/36. FHA loans are a little less restrictive, requiring a 29/41 ratio.

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

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

For example:

With a 28/36 qualifying ratio

  • 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, use this Mortgage Loan Pre-Qualifying Calculator.

Remember these ratios are just guidelines. We'd be happy to help you pre-qualify to help you determine how much you can afford. Enotiva Lending Solutions Inc can answer questions about these ratios and many others. Give us a call: 407-496-3555. Ready to begin? Apply Online Now.

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