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.
Share:
RELATED MORTGAGE ADVICE FROM SCOTT SHELDON
New Fannie Mae Departing Residence Rental Income Rules: What Homebuyers Need to Know
Fannie Mae’s 2026 departing-residence update changes how rental income may be documented when you keep your current home as a rental and buy another primary residence.
How to Buy a Home With a Financed Down Payment
A financed down payment program may help qualified buyers purchase with little or no down payment. Learn the payment tradeoffs and who it may fit.
Income, Credit, and Down Payment: How Mortgage Approval Really Works
Mortgage approval is about more than a credit score. Learn how income, debt, credit, and down payment work together when buying a home.
How to Use Child Support Income to Qualify for a Mortgage
For many homebuyers, every source of income matters when qualifying for a mortgage. If you…
View More from The Mortgage Files:
3 Comments
begin your mortgage journey with sonoma county mortgages
Let us make your mortgage experience easy. Trust our expertise to get you your best mortgage rate. Click below to start turning your home dreams into reality today!
[…] lenders are still restrictive on debt ratio, most allowing no more than 45% of the monthly income, with changes coming in January 2014 reducing […]
[…] payment-to-income ratio not exceeding […]
[…] costs is taking on a mortgage payment that, combined with your other non-housing payments, is at 45% of your income (before factoring in 2106 expenses) and hoping the math will automatically work in your […]