What the DTI Tool Does & Who It’s For
The Debt-to-Income (DTI) ratio is the mathematical formula banks use to see if you can afford to take on a home loan. This tool is for anyone in the "pre-shopping" phase. It calculates your **Back-End Ratio**, which includes your house payment plus all other monthly obligations.
How to Use the DTI Specialist
Enter your **Gross Monthly Income** (the amount you earn before taxes, health insurance, or 401k contributions). Then, list your recurring debts. Note: You do not need to include groceries, utilities, or gas—lenders only care about debts that appear on your credit report.
Why Your DTI Ratio Matters
In 2026, most conventional loans require a DTI of **43% or lower**. If your ratio is too high, you have two choices:
1. Increase your income.
2. Pay off a specific debt (like a car loan) to "free up" room for the mortgage payment.
💡 The "Rule of 36"
Historically, a 36% DTI is considered the "gold standard." At this level, you have enough financial cushion to handle home repairs and unexpected emergencies without missing a payment.
DTI FAQ (SEO Optimized)
No. Your DTI ratio is not part of your FICO calculation, but it is just as important as your score when applying for a loan.
Only "hard" debts: Mortgages, student loans, auto loans, credit card minimums, and child support/alimony.
Some FHA and VA loans allow up to 50% (or even 56% in rare cases), but you will likely pay a higher interest rate and higher mortgage insurance premiums.