Your debt-to-income (DTI) ratio is simply how much of your income goes toward debt payments every month. Lenders need to know you’ll have enough money coming in every month to make all your debt payments (including your new home loan) and still have money left over to cover your normal living expenses. This reduces the risk that you will default on your loan, leaving the lender exposed.
While every lender is different, most lenders want to see your DTI ratio at 43% or below.
A debt-to-income ratio is usually broken into two categories for an FHA loan: front-end and back-end.