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What Is DTI? And Why It Matters for Mortgage Approval

Loan Programs
May 01, 2025•1 min read

What Is DTI (Debt-to-Income Ratio)?

Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes toward paying debts. Lenders use this number to determine how much house you can afford.

Formula:

DTI = Total Monthly Debt Payments ÷ Gross Monthly Income

Types of DTI Lenders Look At

1. Front-End DTI

This includes only your proposed monthly housing expenses:

2. Back-End DTI

This includes ALL monthly debts:

Why DTI Matters for Mortgage Approval

Ideal DTI by Loan Type

Loan TypeMax DTI AllowedFHACheck with your lenderConventionalCheck with your lenderVACase-by-case (residual income matters more)USDACheck with your lender

How to Improve Your DTI

  1. Pay down credit cards and reduce revolving debt

  2. Avoid financing big purchases before closing

  3. Don’t co-sign for anyone during the loan process

  4. Increase your income with side work, documented bonuses, or a co-borrower

📞 Ask Tim Lyons for a personalized breakdown of your DTI and how to improve your approval odds!

Final Thoughts

Understanding and managing your DTI could be the difference between approval and denial. But you don’t have to figure it out alone.

📞 Contact Tim Lyons today to get a customized pre-approval and know exactly what you qualify for.

Required Disclosure

Loan approval is not guaranteed and is subject to underwriting guidelines, including credit, income, assets, and property evaluation.


NMLS #2182927 | Equal Housing Lender

👤 Tim Lyons
Licensed Mortgage Broker – Florida & Ohio
Helping Florida homebuyers qualify smarter and buy with confidence.

Tim Lyons is a licensed mortgage loan originator in Florida and Ohio.

Tim Lyons

Tim Lyons is a licensed mortgage loan originator in Florida and Ohio.

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