FOA Tools

Debt-to-Income Calculator

Tally up all your debts to calculate the ratio of your total debt to your total income.

Before you can start down the road to buying your dream home, you should understand what your finances look like in the grand scheme. Lenders view potential buyers’ debt-to-income (DTI) ratio before approval to ensure the individual can afford to take on more debt. This debt-to-income calculator figures out your percentage of debt compared to your income and allows you to know if buying a home is the right move for you currently.

Estimated home loan eligibility

Your DTI is very good. Having a DTI ratio of 36% or less is considered ideal, and anything under 20% is excellent. Your DTI is good. Having a DTI ratio of 36% or less is considered ideal. Your DTI is OK. It's under the 50% limit, but having a DTI ratio of 36% or less is considered ideal. Paying down debt or increasing your income can help improve your DTI ratio. Your DTI is over the limit. In most cases, 50% is the highest debt-to-income that lenders will allow. Paying down debt or increasing your income can improve your DTI ratio.
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Debt-to-Income Calculator Help

This DTI calculator is an essential first step in the home-buying process. Learn whether you have a healthy level of debt that won’t hinder you from applying for a new home loan, or use this calculator to discover how much debt you need to repay to achieve an ideal DTI ratio.

Enter the following information and the calculator will automatically add your total monthly debt payments and divide them by your gross monthly income for your debt-to-income ratio. Here’s the info you will need to provide for an accurate calculation:

Annual Income: Enter your total annual income before taxes and deductions are taken out. If you do not have a set salary, input a yearly amount based on your average monthly income.

Minimum Credit Card Payment: This is the combined total of all credit card debt you owe. If you pay more than the minimum each month, include only the monthly minimum payment for the calculation.

Car Loan Payments: Include your monthly car loan payments for leased or purchased vehicles. Don’t forget to include a partner or spouse’s car payment if any of your paycheck is used to cover it.

Other Loan Obligations: Include your combined monthly minimum payments for student loans, personal loans, and other loans currently in repayment.

Taking Your Results to the Next Step

Based off of the calculations, you either have a good DTI and are ready to buy a home, or you need to decrease your debt ratio to qualify. We can help you with both.

To decrease your DTI, you need to decrease your debt load — i.e. sell a car or pay off a credit card, or you need to lower your monthly minimum payment obligations. Our student loan refinancing and personal loans can help you tackle your debt repayment faster and at a lower interest rate. Refinancing your credit card debt or student loan debt to a lower interest rate can lower your monthly minimum payment and make your debt-to-income ratio more manageable.

If your DTI is already in the green, then congratulations! There is a good chance you are ready to take the next steps to buying a new home. Contact one of Finance of America Mortgage’s 1,500 advisors today to help you find the right home loan for your unique buying needs.

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