Debt-to-Income Ratio
Debt-to-income ratio compares the monthly debts a lender counts with the income a lender can document. It is one part of mortgage approval.
Before you decide
- DTI is not the only approval factor.
- How income and debts are counted can matter more than the simple formula.
- Different loan programs and lenders may count things differently.
How Lenders Look At Monthly Debt
DTI usually compares monthly debt payments with monthly income. The hard part is knowing which income can be documented and which debts the lender must count.
Why Online Estimates Can Be Off
People often estimate DTI with the wrong income number, leave out a debt, or count money that a lender cannot use. A real loan review uses documented income and the debts required by the loan program.
Keep reading
A purchase loan helps a borrower buy a home and is evaluated through income, assets, credit, property, occupancy, down payment, and program-specific rules.
Refinance MortgagesA refinance replaces an existing mortgage with a new loan structure and should be evaluated by purpose, costs, payment change, equity, timeline, and break-even logic.
Conventional LoansA conventional loan is a common home loan that is not insured by FHA, VA, or USDA. Lenders review credit, income, assets, the property, and how you plan to use the home.
FHA LoansFHA loans are insured by the Federal Housing Administration and are commonly reviewed for borrowers who need flexible credit, down payment, or qualification rules.
Where this information comes from
Fannie Mae - agency
https://selling-guide.fanniemae.com/U.S. Department of Housing and Urban Development - official
https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1Reviewed by Nick Cunningham, NMLS #907393. Last reviewed 2026-06-07.
Educational information only. Not personal financial, legal, tax, or benefits advice.