What Is a Good Debt-to-Income Ratio When Applying for a Mortgage

Your debt-to-income (DTI) ratio is essential for mortgage applications, comparing monthly debt payments to gross income. A lower DTI indicates better financial health and increases the likelihood of mortgage approval and favorable terms. Typically, a DTI above 43% may hinder approval, while lenders prefer ratios below 36%. To improve your DTI, focus on paying down debts and increasing income. While important, DTI is just one factor in the mortgage approval process, alongside credit score and employment history.