Credit and Qualification
Debt-to-Income Ratio Explained
Published 2026-07-31 · Last reviewed 2026-07-31 · Reviewed by Jim Lyddon, NMLS #2573609
Debt-to-income compares your monthly debt obligations, including the proposed housing payment, to your gross monthly income. It is often the binding constraint on how much you can borrow, which means reducing a monthly obligation can increase buying power more than adding to a down payment.
What to know
- Includes the proposed principal, interest, taxes, insurance, HOA and mortgage insurance.
- Installment debts, revolving minimums and certain obligations count.
- Allowable ratios vary by program and compensating factors.
- Paying off one small monthly payment can change the outcome.
How Jim approaches this
Bring your specific numbers. General education gets you oriented, but the decision only becomes clear when it is run against your income, your cash position, the property you are considering and how long you plan to keep the loan. That conversation is free and does not require an application.
The information on this website is provided for general education only and does not constitute financial, tax or legal advice. Loan programs, guidelines and availability are subject to change and to borrower and property qualification.
JHL Mortgage, Inc. is an Equal Housing Opportunity lender. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.