Front-End Ratio

The percentage of your gross monthly income that goes toward all monthly debt obligations, housing payment plus credit cards, car loans, and student loans. Most lenders prefer a back-end ratio below 43–50%.

A detailed history of your borrowing and repayment behavior, compiled by the three major credit bureaus: Equifax, Experian, and TransUnion. Lenders pull your credit report to assess your likelihood of repaying the loan.

The percentage of your gross monthly income that goes toward all debt payments. Lenders use DTI to determine how much you can afford to borrow. Most conventional loans require a DTI below 45–50%.

The home a borrower is moving out of when buying a new primary residence. If it's being converted into a rental, FHA generally requires the borrower to be relocating more than 100 miles for employment, a signed one-year lease, proof of the security deposit or first month's rent, and an appraisal confirming market rent and at least 25% equity before that rental income can offset the departing mortgage payment on the new loan's DTI.