Mortgages & More

Bringing Dreams to Reality

  • Home
  • About
  • Resources
    • First Time Buyer Tips
    • First Time Seller Tips
    • Home Appraisal
    • Home Inspection
    • Loan Programs
    • Loan Process
    • Loan Checklist
    • Mortgage FAQ
    • Mortgage Glossary
    • What to Expect at a Loan Closing: A Step-by-Step Guide
  • Calculator
  • Apply
  • Blog
  • Contact Us
Block
Katrina Moyer Logo
Committed to providing financial solutions for homeownership
Home Purchase
Home Refinance
house icon
Get a Rate Quote
Want a quick quote? Fill out this form
checklist
Loan Checklist
Make sure you have all you need!
Chat Bubble
Have questions?
Ask us today!
Apply Now
Apply Now
Ready to get started? Click here!

The Connection Between Your Debt-to-Income Ratio and Mortgage Approval

October 10, 2025 by Katrina Moyer

When applying for a mortgage, one of the most important factors lenders review is your debt-to-income ratio. This simple calculation helps determine how much of your monthly income is already committed to paying debts, and it plays a major role in whether you qualify for a home loan. Understanding how this ratio works can improve your chances of securing the right mortgage.

What Debt to Income Ratio Means
Your debt-to-income ratio, often called DTI, measures the percentage of your monthly income that goes toward paying debts. These debts include credit cards, car loans, student loans, and the expected mortgage payment. Lenders use this figure to assess whether you can comfortably handle the additional responsibility of a mortgage without overextending yourself.

How Lenders Calculate It
The formula is straightforward. Lenders add up your total monthly debt payments and divide that number by your gross monthly income. For example, if you earn 6,000 dollars per month before taxes and your debt payments are 2,000 dollars, your debt to income ratio is 33 percent. Generally, most lenders prefer to see this number under 43 percent, although the specific limit can vary depending on the loan program.

Why It Matters for Mortgage Approval
Lenders want to ensure that borrowers are financially stable and unlikely to default. A lower debt to income ratio signals that you have room in your budget for housing costs, which makes you a stronger candidate. A higher ratio, on the other hand, may indicate that your finances are stretched, which can make it harder to qualify or may limit the loan amount you are offered.

Ways to Improve Your Ratio
If your debt-to-income ratio is higher than recommended, there are strategies to lower it. Paying down credit card balances or paying off smaller loans can quickly reduce your debt payments. Avoiding new debt before applying for a mortgage is also important. In some cases, increasing your income through a raise, side work, or a second job can help balance the equation.

Managing your debt-to-income ratio is one of the most effective ways to strengthen your mortgage application. By preparing ahead of time, you can improve your chances of approval and secure more favorable loan terms.

Filed Under: Mortgage Tips Tagged With: Debt-to-Income ratio, Mortgage Approval, Mortgage Tips

  • 1
  • 2
  • 3
  • …
  • 1149
  • Next Page »

Kay Monigold

Katrina Moyer
Call (863) 296-7181
katrina@mortgagesandmore.me

 

Connect With Me

How may I help?

Browse articles by category

Quick Links

  • Accessibility Statement
  • Privacy Policy
  • Blog
  • Contact Us
  • Apply Now

Mortgages & More, LLC
NMLS #2323345

Please feel free to contact me at katrina@mortgagesandmore.me with any thoughts, comments, or questions about my work—I’m always interested in making new professional acquaintances.

Equal Housing Lender Logo

Our Location

810 1st St S
Winter Haven, FL 33880

Copyright © 2025 · Powered by MySMARTblog

Copyright © 2025 · Genesis Sample Theme on Genesis Framework · WordPress · Log in