Key Takeaways
- Lenders use gross monthly income, not take-home pay.
- All recurring monthly debts count, including forgotten store cards or co-signed loans.
- Request a detailed breakdown from your lender to see their exact calculation.
Is my DTI calculation wrong?
Your DTI calculation might not match the lender's because they count different income sources and monthly obligations than you expected. Lenders use gross monthly income (before taxes) and include all recurring monthly debt payments, not just credit cards and loans.
Lenders typically include your salary, bonuses, overtime, and other regular income, but they verify everything through pay stubs and tax returns. For debts, they count minimum payments on credit cards, student loans, car loans, and other installment debts. They also include housing costs like property taxes, insurance, and HOA fees if you're buying a home.
Check your credit report for any accounts you forgot about—old store cards, medical debt, or co-signed loans can affect the calculation. Compare your income calculation with recent pay stubs to make sure you're using gross pay, not take-home.
If the DTI calculation doesn't match what you expected, ask the lender for a breakdown showing exactly which debts and income sources they included. They can walk you through their calculation and explain any items you have questions about.
