How do lenders calculate my debt-to-income ratio, and what counts as debt?

Lenders divide your total monthly debt payments by your gross monthly income to get your DTI. Counted debts include the new mortgage payment (principal, interest, taxes, insurance, HOA), plus minimum payments on credit cards, auto loans, student loans, personal loans, and any child support or alimony. Not counted are utilities, groceries, insurance premiums outside escrow, or streaming subscriptions. Student loans in deferment are still often counted using a percentage of the balance. Conventional loans typically prefer a back-end DTI at or below 43% to 45%, though automated underwriting sometimes allows higher with strong compensating factors. Paying off a car loan or a card before applying can meaningfully raise your buying power. Model the impact with the Home Affordability Calculator at wealthserene.com/tools/home-affordability.