Understanding Your Debt-to-Income Ratio

Your debt-to-income ratio, or DTI, compares your monthly debt obligations with the monthly income the lender can use to qualify you for a mortgage. It is one of several factors considered when reviewing your application.

How is DTI calculated?

Divide your total qualifying monthly debt payments—including the proposed housing payment—by your qualifying monthly income, then multiply by 100.

For salaried borrowers, qualifying income generally starts with gross income before taxes and deductions. Self-employment, overtime, commissions, rental income, and other income sources may require different calculations and documentation.

What payments are included?

Your qualifying housing expense generally includes:
• Mortgage principal and interest.
• Property taxes.
• Homeowners insurance and flood insurance, when applicable.
• Mortgage insurance, when required.
• Homeowners association or condominium dues.
• Payments on additional loans secured by the property, when applicable.

HOA and condominium dues count toward qualifying housing expenses even when paid separately from your mortgage.

Other obligations may include vehicle loans, student loans, credit card minimum payments, other mortgages, and required support payments. The treatment of each obligation depends on the applicable loan guidelines.

A simple example

Suppose your qualifying monthly income is $6,500, your proposed housing expense is $2,000, and your other qualifying monthly debt payments total $600.

Your total monthly obligations would be $2,600.

$2,600 ÷ $6,500 × 100 = 40% DTI.

This is an illustration only. A 40% DTI does not guarantee approval or mean that the payment fits your personal budget.

What DTI is allowed?

There is no single limit that applies to every mortgage. Requirements vary by loan program, lender, and whether the application receives automated or manual underwriting.

Credit history, down payment, reserves, and other factors can also affect eligibility. We review your circumstances rather than relying on a general rule of thumb.

Qualifying is different from being comfortable

DTI does not capture every household expense. Groceries, utilities, childcare, healthcare, savings, and other everyday costs still matter.

Your borrowing limit may be higher than the amount you feel comfortable spending. Start with your household budget and a monthly payment that leaves room for your other priorities.

Have questions about your numbers?

Platinum Advantage Mortgage helps buyers and homeowners throughout Florida understand their financing options.

Call 407-341-4313 or email rjolley@platinumadm.com. Use our designated secure process to submit financial documents or sensitive personal information.

Loan approval is subject to lender underwriting requirements.