What is the difference between the front-end and back-end DTI ratios lenders use?

Lenders look at two debt-to-income ratios. The front-end (housing) ratio is your total monthly housing cost — principal, interest, property taxes, insurance, and HOA dues — divided by gross monthly income; many lenders like this under about 28%. The back-end ratio adds all your other monthly debt payments (car loans, student loans, minimum credit card payments) and is usually capped around 36% to 43%, though some programs allow more with strong compensating factors. Note the ratios use gross, pre-tax income, so your actual take-home affordability is tighter. The Consumer Financial Protection Bureau explains these standards on consumerfinance.gov. Run your numbers with the Home Affordability Calculator at wealthserene.com/tools/home-affordability before you shop, since the back-end ratio is what usually kills borderline approvals.