When assessing the amount a person is eligible to borrow, lenders rely heavily on a ratio of the borrower’s monthly debt to monthly income. This ratio, called a “debt-to-income” ratio or DTI. We calculate two ratios, called the “front” and “back” DTI. The math is quite simple. Your total primary housing expense (including the loan, taxes, insurance, mortgage insurance and HOA dues) divided by your monthly pre-tax income is your front DTI. Add all of your other minimum payments to your total primary housing expense and divide by your income again. That’s your back DTI.

DTI ratios of 33/43 are acceptable for most loan programs (that’s a total house payment of no more than 33% of your income and total monthly payments of no more than 43%), but exceptions abound.