Ratio of Debt-to-Income

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The debt to income ratio is a tool lenders use to calculate how much money is available for a monthly mortgage payment after you have met your various other monthly debt payments.

Understanding the qualifying ratio

Most conventional mortgage 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.

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 homeowners' insurance, homeowners' dues, PMI - everything that makes up the full payment.

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

Some example data:

28/36 (Conventional)

  • Gross monthly income of $6,500 x .28 = $1,820 can be applied to housing
  • Gross monthly income of $6,500 x .36 = $2,340 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

  • Gross monthly income of $6,500 x .29 = $1,885 can be applied to housing
  • Gross monthly income of $6,500 x .41 = $2,665 can be applied to recurring debt plus housing expenses


If you'd like to run your own numbers, feel free to use our very useful Loan Qualification Calculator.

Remember these ratios are only guidelines. We will be happy to pre-qualify you to help you figure out how large a mortgage you can afford. At The Mortgage Superstore, we answer questions about qualifying all the time. Give us a call at 575-769-9006.