What Is The Debt-To-Income Ratio (DTI)?

What is the Debt-to-Income Ratio? Can you afford to buy a house?

Check out this short video to see how they decide if you might qualify for a mortgage!


We close many loans in Port Charlotte, Punta Gorda and North Port, FL.

Measuring your existing debts against your existing income is one part of a lender’s required assessment of your ability to repay a loan.

Like the video says:  debts are existing financial commitments; a car payment is a debt a grocery bill is not.

To calculate your debt-to-income ratio add up your monthly debt payments and divide them by your GROSS monthly income. (Gross income is generally the amount of money you earn BEFORE taxes and other deductions.) The Federally-established debt-to-income target is a maximum of 43% for Qualified Mortgages.

If your ratio is higher there may be other loans available  – however, there may also be additional questions to establish your ability to repay, and the rates may be different than those available for Qualified Mortgages.

Studies suggest that a high debt-to-income ratio puts a homeowner at greater risk of challenges making monthly payments. So consider your situation and risks carefully before exceeding that suggested ratio.

If you have questions about purchasing a home in Port Charlotte, Punta Gorda, or North Port please feel free to contact us at

Suncoast One Title Serving Port Charlotte, Punta Gorda and North Port!

Posted in Credit:, Going To Market:, Mortgages:, Sales Process:, Title and Closing.