What debt-to-income ratio do lenders want to see?

Your debt-to-income ratio (DTI) is your total monthly debt payments divided by your gross monthly income, and lenders use it to judge whether you can handle a new loan. For a conventional mortgage, lenders generally want your total DTI — including the new house payment — at or below about 43%, and many prefer 36% or less, with no more than around 28% going to housing alone. Some loan programs allow higher DTIs with strong compensating factors like good credit and reserves. To improve your DTI, pay down loan balances (not just card balances), avoid taking on new payments before applying, and increase income where you can. Note that DTI uses minimum required payments, so paying off a small loan entirely can free up the ratio more than chipping at a big one. Check your readiness at wealthserene.com/assessments/mortgage-readiness.