DTI Calculator

Gross monthly income before tax, and only income a lender can document as stable and likely to continue. Salary is straightforward. Bonus, overtime and commission usually need a two-year history and are averaged over that period. Self-employment income comes off the tax returns after business expenses, which is often far below what the deposits suggest. Rental income is counted net, commonly at seventy-five percent of gross rent to allow for vacancy and repairs, and only where there is a lease or a schedule E. Enter what is documentable, not what you earn.

Anything on your credit report with a required monthly payment, plus court-ordered obligations. Car loans and leases, student loans, credit card minimums, personal loans, child support and alimony all count. Utilities, insurance, groceries, phone bills and retirement contributions do not. Two traps: a lease with ten payments left still counts on most conventional programs even though an instalment loan under ten payments can be excluded, and a deferred student loan is not free — lenders impute a payment, commonly half to one percent of the balance, when no payment is reported.

As a guideline, not a gate. It came from manual underwriting and it is still a sensible personal limit, but automated underwriting has approved conventional loans well above it for years when credit, reserves and loan-to-value are strong. In practice you will see conventional files approved to 45, and to 50 through the agency engines with compensating factors. FHA commonly runs 31/43 manually and higher with an automated approval. None of that is a promise: an engine can decline at 38 and approve at 49 on the same day.

Back-end, almost always. It is the one most programs set a hard maximum on, and it is the one the automated engines weight. Front-end is watched on FHA and by some manual underwriters, and it is a useful personal check — a housing payment above about a third of gross income leaves very little room for anything to go wrong. If your back-end ratio is fine but your front-end is high, you have a housing cost problem rather than a debt problem, and the fix is a cheaper house rather than paying off a car.

Pay off the debt with the worst payment-to-balance ratio, not the largest balance. A credit card with a small balance and a minimum payment of forty dollars removes forty dollars from the numerator; a student loan with a much larger balance and a payment of sixty removes sixty. What matters is the monthly payment, not what you owe. Paying a car loan down without paying it off usually does nothing at all, because the payment does not change. The additional-debt-capacity figures on this page work in the same units for that reason.

No, and that is the point of one. A DSCR loan is underwritten on the property's rent against its own payment, with no personal income documentation and no debt-to-income calculation at all. If your ratio here rules out a conventional investment-property loan, that is the usual next door to knock on — at the cost of a higher rate and a larger down payment. The DSCR calculator on this site sizes one, and the DSCR loan calculator shows what it would lend.