What is a debt‑to‑income (DTI) ratio?

The DTI ratio measures the portion of your gross monthly income that goes toward debt payments, including the mortgage you’re applying for. Lenders use it to gauge whether you can comfortably handle a new loan.

Typical DTI limits for conventional loans

• Front‑end (housing) ratio: Generally capped at 28% of gross income.
• Back‑end (total) ratio: Usually limited to 36% of gross income.
• With strong compensating factors—such as a credit score above 740, a sizable down payment, or substantial cash reserves—many lenders in New Hampshire will consider borrowers with a back‑end DTI as high as 45%, and in rare cases up to 50%.

Why do these limits exist?

Lenders set DTI caps to protect both the borrower and the loan. A lower DTI means the borrower has more discretionary income left after paying debts, reducing the likelihood of missed mortgage payments and default.

New Hampshire‑specific considerations

• New Hampshire has no state income tax on wages, so your taxable income used for DTI calculations is the same as your federal gross income.
• Most home purchases in the state close through an attorney rather than a title‑company, which can affect closing‑cost timing but does not change DTI calculations.
• The New Hampshire Housing Finance Authority offers programs that can provide down‑payment assistance, helping some borrowers qualify even if their DTI is near the upper limit.

These guidelines are general information. Your personal situation may differ, and you should consult a qualified mortgage professional for advice tailored to your needs.