Ratio of Debt-to-Income

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

About the qualifying ratio

In general, underwriting for conventional mortgage loans needs a qualifying ratio of 28/36. FHA loans are a little less strict, requiring a 29/41 ratio.

The first number in a qualifying ratio is the maximum amount (as a percentage) of gross monthly income that can go to housing costs (this includes loan principal and interest, PMI, homeowner's insurance, property tax, and HOA dues).

The second number is the maximum percentage of your gross monthly income that should be spent on housing expenses and recurring debt. Recurring debt includes auto/boat payments, child support and monthly 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'd like to calculate pre-qualification numbers with your own financial data, please use this Loan Pre-Qualification Calculator.

Remember these ratios are just guidelines. We will be happy to pre-qualify you to help you determine how large a mortgage you can afford. Secured Horizon Financial Group, Inc can answer questions about these ratios and many others. Give us a call at (305) 891-6500.