DTI is the single number mortgage lenders care about most. Here's how it's calculated and what it means for your approval.
Add all monthly minimum debt payments: proposed mortgage payment (including tax, insurance, HOA), car loans, student loan minimums, credit card minimums, personal loans. Divide by gross monthly income (before tax, before deductions). The result is your back-end DTI.
| Back-end DTI | Meaning |
|---|---|
| Under 36% | Excellent — most loan programs available, best rates |
| 36-43% | Good — conventional loans typically available |
| 43-50% | Possible with FHA loans or compensating factors (large down payment, high credit score) |
| Above 50% | Most programs unavailable — need to reduce debts before applying |
Pay down high-balance debts to reduce minimum payments. Don't take on new car loans or credit cards before applying. Increase income with a raise, second job, or documented side income. Avoid co-signing loans for others. Consider a longer loan term (30 vs 15 years) to lower the proposed payment.
The calculator shows your projected DTI at different home prices.