The formula
DTI is your total monthly debt payments divided by your gross monthly income. $1,800 in payments on $6,000 of income is a 30% DTI.
What lenders want
Many lenders prefer DTI under 36%, and mortgage programs often cap around 43–50%. Lower DTI means more room in your budget for a new payment.
DTI vs. credit score
Your score measures how you've handled credit; DTI measures how much of your income is already committed. Strong applications need both.
How to lower it
Pay down balances to shrink minimum payments, avoid new obligations before big applications and document all income sources.
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