Calculate your debt-to-income ratio to see if you qualify for an FHA loan.
Enter your income and debt information below to calculate your DTI ratios for FHA loan qualification.
The front-end ratio compares your total housing expenses to your gross monthly income:
Front-End DTI = (Total Housing Expenses ÷ Gross Monthly Income) × 100%
FHA typically requires a front-end ratio of 31% or less, though exceptions can be made with compensating factors.
The back-end ratio compares all your monthly debt payments (including housing) to your gross monthly income:
Back-End DTI = (Total Monthly Debts ÷ Gross Monthly Income) × 100%
FHA typically requires a back-end ratio of 43% or less, though it can go up to 50% with strong compensating factors.
If your DTI ratios exceed FHA guidelines, these compensating factors may help you qualify:
Focus on paying off credit cards and other high-interest debts first to reduce your monthly obligations.
Don't open new credit accounts or take on additional loans while preparing to apply for a mortgage.
If possible, completely eliminate smaller debts to reduce the number of monthly payments you're making.
Consider consolidating high-interest debts into a single loan with a lower monthly payment.
Postpone major purchases like cars or furniture until after your mortgage is approved.
If you've been at your job for a while and performing well, consider asking for a salary increase.
Additional income sources can help improve your DTI ratio, though lenders typically want to see a 2-year history.
If you have a spouse or partner with income and good credit, applying jointly can improve your DTI ratio.
Make sure all legitimate income is included: bonuses, commissions, overtime, alimony, etc.
FHA loans allow non-occupant co-borrowers (like parents) whose income can help you qualify.
A down payment of 10% or more can sometimes help offset a higher DTI ratio and reduces your loan amount.
A higher credit score can sometimes compensate for a slightly higher DTI ratio and may qualify you for better rates.
Having several months of mortgage payments in savings after closing can serve as a compensating factor.
Important: If your DTI ratios are significantly above FHA guidelines, it may be better to improve your financial situation before applying. This can save you from potential disappointment and protect your credit score from unnecessary inquiries.
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