A debt income ratio, DTI for short, is the percentage of your gross monthly income that is allocated for reoccurring monthly debt obligations plus your total mortgage payment. The way the math is calculated is by taking any consumer monthly debt obligations on a monthly basis and adding them to the proposed monthly house payment you’re going to be taking on then dividing that by your gross monthly income.
Here is a helpful blog post that talks about how much income you need to a buy a Sonoma County home.
If that number is 45% or lower, you have a good debt to income ratio and you’ll have an easier time securing a home loan. If that percentage is greater than 45%, you’ll want to make sure you have an in-depth conversation with a mortgage lender of your choice about paying off debt to qualify, reducing your purchase price expectations or increasing your down payment. You can get started today to see what your debt to income ratio is by getting prequalified online with Sonoma County Mortgages.