What Is a Debt-to-Income Ratio (DTI) When Buying a Home in NH?

🏡 What Is a Debt-to-Income Ratio (DTI) When Buying a Home in NH?

If you’re planning to buy a home in Plymouth, Campton, Thornton, Rumney, Ashland, or anywhere in Central NH, your lender will talk a lot about your Debt-to-Income Ratio, also known as DTI.

Understanding DTI can make the difference between getting approved — or denied — for a mortgage.

Here’s exactly what it means.

⭐

What Is Debt-to-Income Ratio (DTI)?

Your DTI compares your monthly debt payments to your gross monthly income.

The formula:

DTI = Total Monthly Debts ÷ Gross Monthly Income

This helps lenders determine whether you can afford your mortgage payments.

⭐

What Debts Count Toward DTI?

Lenders typically include:

✔ Car loans

✔ Student loans

✔ Credit card minimums

✔ Personal loans

✔ Child support / alimony

✔ Other mortgages

✔ Installment loans

NOT included:

❌ Cell phone bills

❌ Utility bills

❌ Groceries

❌ Insurance premiums

❌ Gas or personal expenses

Only documented, recurring debts count.

⭐

What Is a Good DTI for NH Homebuyers?

General guidelines:

✔ Conventional Loans

Most lenders want:

➡️ 45% or lower (sometimes up to 50%)

✔ FHA Loans

More flexible:

➡️ Up to 56.99% in some cases

✔ VA Loans

DTI can exceed 50% depending on residual income and credit.

⭐

Why DTI Matters in New Hampshire

Lenders look closely at DTI because it affects:

✔ How much home you can afford

✔ Your interest rate

✔ Your loan approval

✔ Your monthly mortgage comfort

In areas like Plymouth, Thornton, and Campton — where prices have climbed — DTI can quickly become the limiting factor for buyers.

⭐

How to Lower Your DTI Before Buying

Here are the best strategies:

✔ Pay down credit cards

✔ Avoid new loans

✔ Avoid financing cars or furniture before buying

✔ Increase income if possible

✔ Pay off small loans entirely

✔ Avoid co-signing for anyone

Your lender can run scenarios to help you qualify.

❓

Q&A

Q: Will student loans hurt my ability to buy a home?

A: Not always. Lenders use the payment on your credit report or a percentage of the loan balance — your lender can calculate both to see what works.

📌

Keywords

dti nh, debt to income ratio new hampshire, mortgage approval nh, plymouth nh home buying, campton nh loan requirements, thornton nh mortgage guide, rumney nh first time buyers, central nh real estate financing

Jim Johnson Real Estate Agent

58 NH Route 25A

Wentworth, NH 03282

P: (857) 249-7392

W: www.JimJohnsonRealEstateAgent.com

Licensed New Hampshire REALTOR® with Three Hills Real Estate Services

Broker Email: info@ThreeHillsRES.com

Broker Website: www.ThreeHillsRES.com