Process · 4 min read
What debt-to-income ratio do mortgage lenders use?
July 19, 2026 · Written by Bill Egan, NMLS 7342
Short answer
Debt-to-income is your monthly debt payments divided by your gross monthly income. There is no single legal maximum. Automated underwriting looks at the whole file — credit, reserves, the loan type — and a 50 percent ratio can approve while a 36 percent ratio can decline. The rest of the file decides, not a round number from a brochure.
01
Why this comes up
A blog gave you a maximum percentage and your file does not match it. Student loans, a car, or a card you barely use are crowding the ratio and you think you are done.
02
Where this goes wrong
A car, a student-loan payment, or a card minimum was left off the application. Automated underwriting was run on a fantasy ratio. Mid-file the real debts appear, the ratio breaks, and the approval is withdrawn while you are under contract.
03
What we do about it
We do not use a brochure’s speed limit. Automated underwriting looks at the whole file. A 50 percent ratio can approve and a pretty 36 percent can decline. On VA we also look at residual income — leftover cash each month for the household. We count the debts the investor counts, and we say so up front.
04
How to get ready
Add minimum payments on cards, student loans, cars, support, and the new housing payment. Do not pay off a car the week before you apply without telling us — seasoning and source of funds still matter. Bring the debts you actually have. We will not ignore a payment to make the ratio look pretty.