From the RatesQ team · Sample question

What's a good debt-to-income ratio for getting approved?

This educational scenario and its sample explanations are not posts from real users.

My monthly income is $7,500 and my current debts are: car $380, student loans $210, credit cards minimum $95. I want to buy a house around $350k. Am I in range?

Quick Summary

  1. Debt-to-income compares qualifying monthly debt payments with gross monthly income.
  2. Loan programs and lenders apply different eligibility rules.
  3. An approval decision also considers factors beyond this ratio.

Sample explanations

From the RatesQ team

Quick math: on $350k at ~7% rate with 5% down, your PITI would be roughly $2,400-$2,600/month depending on taxes and insurance in your area. Add your existing debts: $380 + $210 + $95 = $685. Total = about $3,085-$3,285. Divided by $7,500 = DTI of ~41-44%. That's within conventional guidelines. You should be in range for pre-approval.

From the RatesQ team

The quick math looks right. One thing to check: minimum payments on credit cards is what counts, not the balance. And student loans: if any are in deferment/forbearance, some lenders use 0.5-1% of the balance as the qualifying payment if you don't have a documented payment. Make sure your student loan status is clear. At 41-44% DTI with good credit you should qualify for conventional. FHA goes higher but you pay MIP. A lender can pre-qualify you with soft pull credit first to give you a more accurate picture.