Debt to Income Ratio

The ratio of debt to income is a tool lenders use to determine how much money is available for a monthly home loan payment after you meet your other monthly debt payments.

How to figure your qualifying ratio

Most conventional mortgage loans require a qualifying ratio of 28/36. An FHA loan will usually allow for a higher debt load, reflected in a higher (29/41) ratio.

The first number is how much (by percent) of your gross monthly income that can be spent on housing. This ratio is figured on your total payment, including hazard insurance, homeowners' dues, Private Mortgage Insurance - everything.

The second number in the ratio is what percent of your gross income every month that should be applied to housing expenses and recurring debt together. Recurring debt includes car loans, child support and credit card payments.

Some example data:

With a 28/36 qualifying ratio

  • Gross monthly income of $3,500 x .28 = $980 can be applied to housing
  • Gross monthly income of $3,500 x .36 = $1,260 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

  • Gross monthly income of $3,500 x .29 = $1,015 can be applied to housing
  • Gross monthly income of $3,500 x .41 = $1,435 can be applied to recurring debt plus housing expenses

If you want to run your own numbers, feel free to use our superb Loan Qualification Calculator.

Guidelines Only

Remember these are just guidelines. We'd be happy to pre-qualify you to help you determine how large a mortgage you can afford.

At Abbey Mortgage, we answer questions about qualifying all the time. Give us a call at 352-369-4200.

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