Does debt-to-income ratio include credit cards?

Yes! Your debt-to-income ratio measures the portion of your monthly income that goes toward recurring debts, such as credit card bills, auto loans, student loans, rents, mortgage payments, and child support. However, it doesn't factor in day-to-day expenses like utilities, transportation, and groceries.

How can I lower my debt-to-income ratio?

When it comes to lowering your debt-to-income ratio , you generally have two options: Increase your monthly income or lower your monthly credit payments.

How important is your debt-to-income ratio?

Your debt-to-income (DTI) determines the maximum amount of money you can borrow when applying for a mortgage. When your debt-to-income ratio exceeds a certain threshold — usually 36–45%, depending on your credit score, down payment, and cash reserves — you may have trouble qualifying for a loan.

What's a good debt-to-income ratio for a mortgage?

As a general rule, your debt-to-income ratio should remain below 36%, with no more than 28% of your income going toward mortgage-related expenses. However, requirements may vary slightly depending on your lender and the type of loan you're applying for. For example, the VA and FHA loans allow for DTIs of up to 41%.

What's included in a debt-to-income ratio calculation?

Your debt-to-income (DTI) ratio takes into account both your future mortgage payment and any recurring debts, such as rent, credit cards bills, outstanding loans, and child support. It divides the total of these debts by your gross monthly income from wages, tips, investments, pensions, and more.

Katy Byrom

Content Writer

Katy Byrom is a content writer for Clever Real Estate brands, which include Anytime Estimate and The Real Estate Witch. She's passionate about helping people unpack the complexities of real estate and make more informed decisions around buying selling and investing.

Prior to joining Clever, Katy worked for a variety of startups and nonprofits as a writer, editor, content manager, and marketing director.

She holds a B.A. from San Diego State University and an M.A. in psychology from Pepperdine University.

When she isn't writing for Clever, Katy can usually be found scouring used book stores, exploring new hiking trails with her cocker spaniels, or making trouble with her 13 nieces and nephews.

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Katy Byrom

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