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Before a lender reads your credit score, they read this ratio.
$7,800 a month gross against $2,950 of debt payments is a 37.8% DTI — workable, but the 43% qualified-mortgage cap says your housing payment can't exceed $2,504. This calculator runs both ratios the way an underwriter does and tells you where you stand.
Homebuyers use it before pre-approval: $2,950 of debts on $7,800 income is 37.8% — the 43% cap says max housing $2,504, and lenders read it before your score.
The guideposts: 36% or below is the traditional comfort line — conventional underwriting smiles at it. Up to 43% qualifies for a Qualified Mortgage, the legal safe-harbor standard most lenders follow. FHA stretches to 50% with compensating factors (strong credit, cash reserves), and VA loans technically have no cap but use 41% as the guideline with residual-income tests. Front-end ratio (housing only) targets 28%. The practical answer: under 36% you shop lenders; 36–43% you shop programs; above 43% you are paying down debt before you are buying a house. One leverage point: paying off a car or card kills the whole monthly payment from the ratio — $400/month of retired debt buys about $80,000 of mortgage capacity.
Counts: every minimum payment on installment and revolving debt (car, student, personal, cards), your housing payment including taxes/insurance/HOA, alimony and child support you PAY, and co-signed loans (yes, even if your kid makes the payments). Does not count: utilities, phone, insurance premiums, groceries, subscriptions, or anything that can be cancelled without a creditor. Income side: gross (pre-tax) income that is documented and likely to continue — salary, documented overtime with 2-year history, bonuses, RSUs with vesting history, and rental income at 75% of gross rent. Deferred student loans no longer get a free pass — most programs count 0.5–1% of the balance monthly even in deferment.
Five levers, ranked by speed. One: pay off the smallest monthly payment entirely — a $180 card minimum disappears from the ratio the month the balance dies (a loan with 10 months left can often be excluded once paid down to 10 remaining payments). Two: ask the lender to exclude debts others pay from their own account for 12 months with proof. Three: raise the income denominator — a documented second job with 2 years of history counts, a new one doesn't yet. Four: buy down the housing payment with points or a cheaper home — DTI is a ratio, the numerator works too. Five: do NOT open new credit or finance furniture before closing — underwriters re-pull credit days before funding and new debt can kill the file at the finish line.