Debt Ratios for Residential Lending

Searching for mortgage advice? We'll be glad to discuss our mortgage offerings! Call us at 952-929-2577. Ready to begin? Apply Here.

Your ratio of debt to income is a tool lenders use to calculate how much of your income is available for your monthly home loan payment after all your other recurring debt obligations have been met.

How to figure the qualifying ratio

In general, underwriting for conventional mortgages needs a qualifying ratio of 28/36. An FHA loan will usually allow for a higher debt load, reflected in a higher (29/41) qualifying ratio.

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, homeowners' dues, PMI - everything that constitutes the payment.

The second number is what percent of your gross income every month that can be applied to housing costs and recurring debt. Recurring debt includes things like car loans, child support and credit card payments.


28/36 (Conventional)

  • Gross monthly income of $8,000 x .28 = $2,240 can be applied to housing
  • Gross monthly income of $8,000 x .36 = $2,280 can be applied to recurring debt plus housing expenses

With a 29/41 (FHA) qualifying ratio

  • Gross monthly income of $8,000 x .29 = $2,320 can be applied to housing
  • Gross monthly income of $8,000 x .41 = $3,280 can be applied to recurring debt plus housing expenses

If you'd like to run your own numbers, please use this Mortgage Loan Qualifying Calculator.

Just Guidelines

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

VENTURE DEVELOPMENT INC can walk you through the pitfalls of getting a mortgage. Give us a call at 952-929-2577.

VENTURE DEVELOPMENT INC 7300 France Ave S #410 Edina, MN 55435
Phone: Cell: Fax:

Why Title Insurance? | Staff Profiles | Contact Us | Closing costs - loans | Closing costs - Ins. | Your FICO score | How Escrow Works | Closing Costs | Tell a Friend | Real Estate Glossary | Home | Loan App Checklist | Mortgage Saving Tips | Your Down Payment | Site Map | Loan Application | The Loan Process | Get Your Loan Faster! | Fixed Vs. Adjustable | Improve Your Credit Score | Should you buy points? | Financing Closing Costs | Getting Qualified | When to Refinance | Loan Application Info | What is a credit score? | Rate Lock Periods | Rates and A.P.R. | Refinancing Options | Getting an Appraisal | Mortgage Calculators | Customer Login | Gifts as downpayment | Eliminating PMI | Disputing Credit Reports | Mistakes on Your Report | Bankruptcy | Getting Your Credit Report | 401k for Downpayment | Buyer Don'ts | Homeowner Deductions | HUD-1 Settlement Statement | Debt-to-Income Ratios | Home Equity Lines of Credit | Home Equity Loans | 100% Financing

Portions Copyright © 2013 a la mode, inc.
Another XSite by a la mode, inc. | Admin LoginTerms of UseSite Map