Ratio of Debt-to-Income

The debt to income ratio is a tool lenders use to determine how much of your income is available for your monthly mortgage payment after all your other monthly debt obligations have been fulfilled.

Understanding the qualifying ratio

Usually, conventional mortgage loans require a qualifying ratio of 28/36. An FHA loan will usually allow for a higher debt load, reflected in a higher (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, HOA dues, PMI - everything that makes up the payment.

The second number is the maximum percentage of your gross monthly income that can be applied to housing costs and recurring debt. For purposes of this ratio, debt includes credit card payments, auto loans, child support, and the like.

Some example data:

A 28/36 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'd like to run your own numbers, feel free to use our Loan Pre-Qualifying Calculator.

Just Guidelines

Don't forget these are only guidelines. We will be thrilled to go over pre-qualification to determine how large a mortgage you can afford.

Financial Edge Mortgage Corp. can answer questions about these ratios and many others. Call us: 425-508-9988.

Basic Pre-Approval

Get the Best Mortgage Rate! Tell us a little about your current needs and we can use that information to match you with just the right loan.

Tell us about your loan needs.
How can we get in touch with you?
Tell us about your credit history.
By checking the box, you agree that Financial Edge Mortgage Corp. may call/text you about your inquiry, which may involve use of automated means and prerecorded/artificial voices.. Message/data rates may apply.