Debt To Income (DTI)

Here is how you calculate DTI:

Take your gross monthly income (before taxes), and multiply that by the highest DTI allowed on a loan program (usually 45%). With that number, subtract out the monthly payments you currently pay besides your mortgage. The number left there is the highest house payment for which you qualify.

For example, here is a model scenario:

Income: $5,000 per month

DTI maximum: 45%

Other debts: car loan $345, credit cards $175, student loan $220; total $740

1. $5,000 x .45 = $2,250.

2. Take $2,250 and minus the $740 for debts, leaving $1,510, which is the highest mortgage payment for which you can qualify.

Now, plug in your numbers and see if you qualify! If you have questions or need help, you can reach us at:

Phone: 801-341-9590

Email: johnny@totalfinancialhealth.com

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