Debt to Income Ratio

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

About the qualifying ratio

Usually, underwriting for conventional mortgages requires a qualifying ratio of 28/36. FHA loans are less restrictive, requiring a 29/41 ratio.

The first number in a qualifying ratio is the maximum percentage of gross monthly income that can be spent on housing (including mortgage principal and interest, private mortgage insurance, hazard insurance, property tax, and homeowners' association dues).

The second number is what percent of your gross income every month which can be applied to housing expenses and recurring debt. Recurring debt includes car payments, child support and credit card payments.

Some example data:

28/36 (Conventional)

  • 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'd like to calculate pre-qualification numbers with your own financial data, feel free to use our Loan Qualification Calculator.

Guidelines Only

Remember these ratios are only guidelines. We'd be thrilled to go over pre-qualification to help you figure out how much you can afford.

Valley Savers Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us at (602) 332-9544.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question