: This is the more critical number for most loan approvals. It combines your projected mortgage payment with all other recurring monthly debts, such as car loans, student loans, and credit card minimums.
: Opening new credit cards or financing a car during the home-buying process can instantly disqualify you by inflating your recurring monthly obligations.
: By putting more money down, you reduce the loan amount and the subsequent monthly mortgage payment, which lowers your DTI. Understanding Debt-to-Income Ratio - Citizens Bank
: Most lenders prefer this to be at or below 28% of your gross monthly income.
: A lower DTI often correlates with more competitive interest rates because it signals lower risk to the lender.
: Ensure you are counting stable bonuses, overtime, or part-time work that has at least a two-year history.
: Higher existing debts directly reduce the amount you can borrow for a home, potentially pushing you into a lower price bracket. Strategies to Lower Your DTI