Mortgage Glossary
Debt Ratio
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A debt ratio, commonly the debt-to-income ratio, measures how much of your gross monthly income goes toward debt payments.
What Debt Ratio means
Lenders use it to judge whether you can handle a new mortgage. The back-end ratio includes the housing payment plus all other debts. Most programs cap it in the low-to-mid 40s, with flexibility for strong files.
Florida example
A buyer earning $7,500 a month with $2,800 in total debt payments including the new mortgage had a 37% debt ratio, well within conventional limits.
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