Question 1

What is a debt-to-income ratio?

Accepted Answer

A debt-to-income (DTI) ratio compares your total monthly debt payments to your gross monthly income. Lenders use it to evaluate whether you can afford to take on additional debt such as a mortgage. It is expressed as a percentage — for example, if you pay $1,800 per month in debts and earn $6,000 per month, your DTI is 30%.

Question 2

What is the 28/36 rule?

Accepted Answer

The 28/36 rule is a guideline used by many mortgage lenders. It says your housing costs (mortgage, property taxes, insurance, and HOA fees) should not exceed 28% of your gross monthly income (the front-end ratio), and your total debt payments should not exceed 36% of your gross monthly income (the back-end ratio). Staying within these limits improves your chances of mortgage approval.

Question 3

What is the difference between front-end and back-end DTI?

Accepted Answer

Front-end DTI (also called the housing ratio) includes only housing-related costs: your mortgage or rent payment, property taxes, homeowner's insurance, and HOA fees. Back-end DTI includes all monthly debt obligations — housing costs plus auto loans, student loans, credit card minimums, and any other recurring debt payments. Lenders look at both ratios when evaluating a mortgage application.

DTI Calculator

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Front-End DTI

Back-End DTI

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DTI vs Qualification Thresholds

Debt Breakdown