# Ratio of Debt-to-Income

Lenders use a ratio called "debt to income" to determine the most you can pay monthly after your other recurring debts are paid.

### About the qualifying ratio

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

For these ratios, the first number is how much (by percent) of your gross monthly income that can go toward housing. This ratio is figured on your total payment, including hazard insurance, HOA dues, Private Mortgage Insurance - everything that constitutes the full payment.

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. Recurring debt includes credit card payments, car payments, child support, and the like.

### Examples:

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 want to run your own numbers, please use this Mortgage Loan Qualifying Calculator.

### Just Guidelines

Remember these ratios are only guidelines. We'd be thrilled to help you pre-qualify to help you figure out how much you can afford.

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