When it comes to getting approved for a mortgage, most people immediately think of their credit score. While it is definitely important, there is another number that can play an even bigger role in your approval, our debt-to-income ratio. Also known as DTI, this number gives lenders a clearer picture of your ability to manage monthly payments and overall debt.
What Is Debt-to-Income Ratio
Your debt-to-income ratio is the percentage of your monthly gross income that goes toward paying debts. This includes things like credit cards, car loans, student loans, and the projected mortgage payment. It does not include groceries, utilities, or other everyday expenses. Lenders use this number to assess whether you can realistically afford to take on a new mortgage without becoming overextended.
Why DTI Matters More Than You Think
You could have a great credit score, but if your debt-to-income ratio is too high, it could still disqualify you from getting approved. That is because lenders want to be sure that you can comfortably handle another monthly payment. A strong DTI shows that you are living within your means and that you are in control of your financial obligations.
What Is a Good Debt-to-Income Ratio
As a general rule, most lenders look for a DTI below 43 percent, but lower is always better. If your DTI is 36 percent or under, you are in a strong position. That said, different loan programs may allow for higher ratios based on other factors, such as credit score or savings. This is where working with a mortgage professional really helps—we can explore the loan options that best match your financial picture.
How to Improve Your DTI
Improving your DTI takes a combination of increasing income and reducing debt. If possible, pay down credit card balances, avoid taking on new loans, and look for ways to boost your monthly earnings. Even small adjustments can make a meaningful difference. If buying a home is your goal, give yourself time to improve your numbers and set yourself up for success.
Let’s Take a Look at Your Numbers Together
You do not have to guess where you stand. We can help you understand your debt-to-income ratio, review your credit profile, and give you a clear idea of what kind of mortgage you can qualify for. The more you know, the more confident you can feel moving forward.
Asking your parents to co-sign a mortgage can be one of the most vulnerable conversations you will ever have. It is not just about paperwork and finances, it is about trust, timing, and long-term commitment. Whether you are a first-time buyer or trying to qualify for better loan terms, a co-signer can make a big difference, but only if everyone involved is fully informed and comfortable.