Ratio of Debt to Income

The ratio of debt to income is a tool lenders use to calculate how much of your income can be used for your monthly home loan payment after you meet your various other monthly debt payments.

About the qualifying ratio

For the most part, conventional loans need 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.

The first number in a qualifying ratio is the maximum amount (as a percentage) of your gross monthly income that can be applied to housing costs (including loan principal and interest, PMI, homeowner's insurance, property tax, and HOA dues).

The second number is what percent of your gross income every month that should be applied to housing expenses and recurring debt. For purposes of this ratio, debt includes payments on credit cards, vehicle loans, child support, and the like.

Examples:

A 28/36 qualifying ratio

  • Gross monthly income of $8,000 x .28 = $2,240 can be applied to housing
  • Gross monthly income of $8,000 x .36 = $2,280 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

  • Gross monthly income of $8,000 x .29 = $2,320 can be applied to housing
  • Gross monthly income of $8,000 x .41 = $3,280 can be applied to recurring debt plus housing expenses

If you want to calculate pre-qualification numbers with your own financial data, feel free to use our Mortgage Loan Qualifying Calculator.

Just Guidelines

Don't forget these are just guidelines. We will be happy to help you pre-qualify to help you figure out how large a mortgage you can afford.

Integris Loans can walk you through the pitfalls of getting a mortgage. Call us: 8014134570.

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9980 S 300 W Ste 200
Sandy, UT 84070