Debt to Income Ratio Calculator

Income Your total income including wages, dividend income, rental income and stipends.

Housing Expenses

Mortgage Payment Your mortgage payment which includes both principal and interest. Co-ops generally don't allow interest only or adjustable rate mortgages.

Common Charges or HoA Fees Common charges for condos or HoA fees (if applicable) for houses.

Property Taxes Leave blank if you have a mortgage and your bank pays property taxes on your behalf via an escrow account that you contribute to as part of your monthly mortgage payment.

Maintenance Fees Co-op apartments only. Taxes attributable to each shareholder are bundled together with the equivalent of common charges.

Home Insurance Leave blank if you have a mortgage and your bank pays your home insurance on your behalf via an escrow account that you contribute to as part of your monthly mortgage payment.

Private Mortgage Insurance Private mortgage insurance (PMI) is typically required if you put less than 20% down for a conventional mortgage.

Other Monthly Expenses

Student Loan Payments Banks and co-ops may differ on how they treat this number. For example, some banks will make a blanket assumption of 2% for monthly payments towards student loan debt in regards to the back end DTI ratio.

Credit Card Payments Banks and co-ops will differ on how they treat this number. Some banks will only count the minimum required payment. Other banks may exclude American Express credit card payments altogether since American Express does not allow a balance to be carried.

Car Lease or Loan Payments Banks and co-ops vary on how they treat car payments. For example, some banks may exclude this number altogether if you have fewer than 10 payments left (i.e. you've almost fully paid off your car loan).

Other Mandatory Payments Please include any other mandatory payments that you must make. This typically means any liability that would show up on your credit report.

Monthly Housing Expenses
Annual Housing Expenses
Monthly Other Expenses
Annual Other Expenses
Total Monthly Expenses
Total Annual Expenses
Front-End DTI Ratio As a common rule of thumb, your total monthly housing expense should not exceed 28% of your monthly gross income.
Back-End DTI Ratio As a general rule of thumb, your back-end DTI ratio should not exceed 43% of your monthly gross income.
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Glossary

Front End Debt-to-Income Ratio

The Front End Debt-to-Income Ratio is the percentage of pre-tax, gross monthly income which covers housing expenses, including your mortgage payment, property taxes, monthly co-op maintenance or condo common charges as well as homeowner’s insurance. The Front End DTI calculation only includes housing-related expenses. It exclude other recurring monthly liability payments, such as student loan and car loan payments.

Back End Debt-to-Income Ratio

The Back End Debt-to-Income Ratio is the percentage of pre-tax, gross monthly income which covers both monthly housing expenses as well as other recurring monthly liability payments, such as car loan and student loan payments.

Back End DTI will always be equal to or greater than than Front End DTI, since the latter excludes non-housing related monthly obligations and only includes your mortgage payment, property taxes, monthly co-op maintenance or condo common charges as well as homeowner’s insurance.

FAQ

What is an acceptable debt-to-income ratio for a lender?

Most lenders are comfortable with a back-end debt-to-income ratio of up to 43%. Specific underwriting guidelines vary by lender. Other financing options, such as a stated income loan, may exist for borrowers who don’t show enough income to qualify for a traditional mortgage.

What debt-to-income ratio is required for a co-op in NYC?

The majority of co-op buildings in NYC require a back-end debt-to-income ratio of 30% or less, and stricter buildings often require 25% or less. Some co-ops may permit a DTI ratio in the low 30s assuming that the purchaser has strong post-closing liquidity.

How much are buyer closing costs in NYC?

Buyer closing costs in NYC are approximately 4% for condos and houses, 2% for co-ops and 6% or more for new developments, assuming you are financing. Closing costs may be lower for an all-cash purchase. You can reduce your closing costs and save up to 2% on your purchase by requesting a Hauseit Buyer Closing Credit, also known as a buyer agent commission rebate.

Is it possible to reduce my buyer closing costs in NYC?

Yes. You can reduce your buyer closing costs and save up to 2% on your purchase by requesting a buyer agent commission rebate through Hauseit. Rebates are a legal and non-taxable way to reduce your buyer closing costs while receiving traditional, full-service representation from a seasoned buyer’s agent throughout the purchase process.

How much can I save with a commission rebate?

At Hauseit, we offer buyers the ability to save up to 2 percent and reduce buyer closing costs through the largest broker commission rebate in NYC. The buyer of a $2 million property in NYC can save $40,000, assuming that the buyer agent commission being offered is 3 percent.

Published: 4/6/20
Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Hauseit LLC is a Licensed Real Estate Broker, licensed to do business in New York under license number 10991232340. Principal Office: 148 Lafayette Street, New York, NY 10013.
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