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When a lender evaluates your mortgage application, they’re looking to see whether the payment you’re taking on is realistic for your current financial situation. These calculations are designed to keep your monthly budget healthy, predictable, and prepared for unexpected expenses. Three numbers drive most affordability decisions.
This ratio highlights what percentage of your gross monthly income would go toward your total housing payment. That payment may include:
Many loan programs aim to keep this ratio around 28 percent, though some programs—including VA loans—may allow flexibility depending on the rest of your financial profile.
This metric helps determine whether the projected payment fits comfortably within your income.
DTI evaluates your full monthly financial commitments by combining your future mortgage payment with recurring debts such as:
Most programs target a DTI of 43 percent or lower. Some loan types, like VA loans, look more closely at your remaining monthly cash flow rather than just the percentage.
This number helps lenders understand your overall financial capacity and long-term sustainability.
Gross income is your total income before taxes and deductions. Depending on your employment type, lenders may count:
Gross income forms the base of every affordability calculation, and lenders focus on stability, consistency, and documentation.
Taken together, these calculations help determine:
Understanding these numbers early helps you make informed choices and removes much of the guesswork from the homebuying process.
If you want help preparing or understanding your own affordability, you can call one of our Game Plan Specialists at (269) 364-6017 or apply now at https://kalamazoomortgage.com/apply/.