Understanding How Debt-To-Income (DTI) Works When Applying For A Mortgage

When applying for a Mortgage, your debt and your income play a huge factor in qualifying for a mortgage. Debt-to-income (DTI) is a ratio which Loan Officers, like myself, look at to determine whether or not you are able to qualify for a mortgage. DTI is based on your monthly Debt and monthly Income.


There are 2 types of DTI:


– Front End DTI is your monthly housing expense
– Back End DTI is all your monthly debt (housing, credit card, loans, etc)


Each mortgage program (FHA, USDA, VA, Conventional) have different requirements when it comes to DTI.


FHA for example is for those who have less-than-perfect credit and/or are first time home buyers. So compared to a Conventional Mortgage which has a lower DTI tolerance, FHA is more lenient and allows borrowers to have a much higher DTI (meaning more debt). This is due to the difference in the purpose of the two products. Same goes for USDA and VA loans – they both have different goals for their loan programs and thus have different DTI requirements.


For a free mortgage consultation and to understand how Debt-to-Income works – please contact me any time via email, text, or phone call! Thank you and I look forward to speaking with you!


Ramazan Sinani
Mortgage Loan Originator
Northeast Financial
NMLS: 1590862 Company NMLS: 117273
Cell: 203-695-6858 Fax: 203-413-6240
[email protected]