1. What is Front DTI Ratio?

The Front-End Debt-to-Income (DTI) ratio measures what portion of a person's monthly income goes toward housing expenses. It's a key metric used by lenders to assess a borrower's ability to manage monthly payments.

2. How Does the Calculator Work?

The calculator uses the Front DTI formula:

Where:

• Housing Expenses — Monthly housing costs including mortgage/rent, property taxes, insurance, and HOA fees
• Monthly Income — Gross monthly income before taxes and deductions

Explanation: The ratio is expressed as a percentage showing how much of income is consumed by housing costs.

3. Importance of Front DTI Ratio

Details: Lenders typically prefer a front-end DTI of 28% or less, though some programs allow up to 31%. A lower ratio indicates better financial health and borrowing capacity.

4. Using the Calculator

Tips: Enter your total monthly housing expenses and gross monthly income in dollars. Both values must be greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between front-end and back-end DTI?
A: Front-end DTI only considers housing costs, while back-end DTI includes all debt obligations (credit cards, car loans, etc.).

Q2: What is a good front-end DTI ratio?
A: Generally, 28% or lower is ideal, 29-35% may be acceptable depending on other factors, and above 36% may make loan approval difficult.

Q3: How can I improve my front-end DTI?
A: Options include increasing income, reducing housing costs, or choosing a less expensive property.

Q4: Does this include utilities?
A: Typically no - standard front-end DTI calculations don't include utilities unless specified by the lender.

Q5: Is this the same as the housing expense ratio?
A: Yes, front-end DTI is sometimes called the housing expense ratio.