Understanding Your DTI (Debt-to-Income Ratio)
Chris Padley | Gateway Mortgage - Your guide through the home loan maze. Helping Oklahoma homebuyers make smart, confident moves.
What Is DTI and Why It Matters
Your Debt-to-Income Ratio (DTI) is the percentage of your gross monthly income that goes toward your monthly debt obligations.
Lenders use this number to determine if you can realistically handle a mortgage payment — and it's often the #1 reason buyers don't qualify (even with great credit).
How to Calculate Your DTI
Formula
Monthly Debt Payments ÷ Gross Monthly Income = DTI %
Gather Your Numbers
Add up all monthly debts (on credit report) and determine your gross monthly income
Calculate
Divide total debts by income and multiply by 100 to get your percentage
Example:
- Total monthly debts: $2,200
- Gross monthly income: $6,000
- DTI = 2,200 ÷ 6,000 = 36.7%
What DTI Do You Need to Qualify?
👉 Lower DTI = better approval odds and potentially better rates.
How to Lower Your DTI
Pay off or reduce credit card balances
Reducing high-interest debt first can quickly improve your DTI
Refinance or consolidate high-interest debts
Combining multiple debts can lower your monthly payment obligations
Hold off on any new loans (especially auto loans)
Avoid taking on additional debt while preparing for mortgage approval
Increase gross income through documented sources
Must be consistent for 2+ years to count
Note: Part-time or side hustle income must be verifiable for 2 years and done alongside your primary job to count toward qualifying income.
Run the Numbers for Yourself
Affordability Calculator
Determine how much house you can afford based on your income and existing debts
Loan Comparison Tool
Compare different loan types and terms to find the best option for your situation
Payment Forecaster
Estimate your monthly payments including principal, interest, taxes, and insurance
Use these free tools to estimate your affordability, compare loans, or forecast monthly payments:
Still Not Sure Where You Stand?
Moving Forward
Build your best plan for homeownership
Identifying Obstacles
Discover what's holding you back
Readiness Assessment
Determine if you're ready now
Let's run your real numbers together. I'll give you clarity on:
- Whether you're ready now
- What's holding you back
- How to build your best plan moving forward
👆 Just click the Contact Me button at the top of this page and let's get started — no pressure, just clarity.
