# Ratio of Debt to Income

Your debt to income ratio is a formula lenders use to determine how much money can be used for your monthly mortgage payment after you meet your other monthly debt payments.

### About your qualifying ratio

Usually, underwriting for conventional loans requires a qualifying ratio of 28/36. FHA loans are less strict, requiring a 29/41 ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to housing (including mortgage principal and interest, private mortgage insurance, homeowner's insurance, property tax, and homeowners' association dues).

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

### Examples:

With a 28/36 qualifying ratio

• Gross monthly income of \$4,500 x .28 = \$1,260 can be applied to housing
• Gross monthly income of \$4,500 x .36 = \$1,620 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

• Gross monthly income of \$4,500 x .29 = \$1,305 can be applied to housing
• Gross monthly income of \$4,500 x .41 = \$1,845 can be applied to recurring debt plus housing expenses

If you'd like to calculate pre-qualification numbers with your own financial data, we offer a Mortgage Loan Pre-Qualifying Calculator.

### Guidelines Only

Remember these are just guidelines. We'd be happy to go over pre-qualification to determine how much you can afford.

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