Lenders use DTI to measure your ability to manage monthly payments. It is calculated by dividing your total monthly debt obligations by your gross (pre-tax) monthly income.
: Your total monthly debt—including the new mortgage, credit cards, car loans, and student loans—should ideally be 36% or less. Maximum Limits by Loan Type : credit to debt ratio to buy a house
: Your prospective monthly housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross income. Lenders use DTI to measure your ability to
To buy a house, lenders primarily look at two distinct "credit to debt" metrics: your and your Credit Utilization Ratio . While DTI determines how much you can afford to borrow, your credit utilization directly impacts the credit score needed to qualify for the best interest rates. 1. Debt-to-Income (DTI) Ratio Maximum Limits by Loan Type : : Your