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%.

A credit score ranging from 300 to 850, developed by Fair Isaac Corporation and used by most mortgage lenders. Scores of 740+ typically qualify for the most competitive rates; FHA loans are available down to 580 with a 3.5% down payment.