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What is a debt-to-income ratio and how does it apply to FHA loans?

April 26, 2017debt-to-income FHA Loans ratio

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What is a debt-to-income ratio and how does it apply to FHA loans?

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Your debt-to-income ratio tells the lender how much you can afford to borrow. It is expressed as 2 numbers with a forward slash (/) between them. The first number is the percentage of your monthly income that will go towards your mortgage payment. The second number is the percentage of your monthly income that will go towards all of your debts combined (including your mortgage payment). Most lenders require a debt-to-income ratio of 28/36. The FHA program allows people to borrow with debt-to-income ratios of 29/41, and in some cases even higher.