Debt-to-Income Ratio

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Your debt to income ratio is a tool lenders use to determine how much of your income can be used for a monthly mortgage payment after all your other recurring debt obligations are met.

Understanding your qualifying ratio

In general, conventional loans require a qualifying ratio of 28/36. FHA loans are less strict, requiring a 29/41 ratio.

The first number is how much (by percent) of your gross monthly income that can be spent on housing costs. This ratio is figured on your total payment, including hazard insurance, HOA dues, PMI - everything that makes up the full payment.

The second number in the ratio is what percent of your gross income every month which can be spent on housing costs and recurring debt together. Recurring debt includes things like car payments, child support and credit card payments.

For example:

A 28/36 ratio

  • Gross monthly income of $4,500 x .28 = $1,260 can be applied to housing
  • Gross monthly income of $4,500 x .36 = $1,620 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

  • Gross monthly income of $4,500 x .29 = $1,305 can be applied to housing
  • Gross monthly income of $4,500 x .41 = $1,845 can be applied to recurring debt plus housing expenses


If you want to run your own numbers, please use this Loan Qualifying Calculator.

Don't forget these ratios are just guidelines. We'd be thrilled to pre-qualify you to help you figure out how large a mortgage you can afford. At Leading Edge Mortgage Corp. , we answer questions about qualifying all the time. Call us: 561-392-0040.

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