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Debt-to-Income Calculation


If you are considering purchasing a home soon, you need to be familiar with your debt-to-income calculation. Understanding this simple math formula could mean the difference between getting approved or getting denied for a home loan.

The discussion below will explain how to calculate this ratio and how it is used by mortgage lenders to approve people to buy a home.

The debt-to-income ratio, also called the DTI ratio by the mortgage industry, is a comparison between how much money people are making versus how much is being spent on debt.

The formula looks like this:

               Total monthly debt payments ÷ monthly income = DTI

Here is a simple example that will explain how the math works.

Shawn and Linda have been married for 3 years and have saved for a down payment on a home. Shawn is an accountant earning a $60,000 per year salary and Linda is an elementary school teacher earning a $35,000 per year salary.

They have the following monthly debt payments: one car loan of $376.25, two credit cards of $65 each, and student loan payments of $486 per month. Their total monthly debt payments are

$376.25 + $65 + $65 + $486 = $992.25

Their monthly income, before taxes are removed, is

               $60,000 + $35,000 = $95,000 yearly

               $95,000 ÷12 = $7,916.67 monthly

Their debt-to-income ratio, or DTI ratio, is

               $992.25 ÷ $7,916.67 = 13%

Very simple math, and very easy to calculate.

The only thing missing is the proposed monthly house payment for their new home. According to their lender, the proposed payment on the home that they are considering is $1,285 per month. So, the new calculation would be

               ($992.25 + $1,285) ÷ $7,916.67 = 28.77%

Now that we have explained the math, let us look at some of the details of this calculation and how lenders view the ratios.

Two Ways to View DTI

Most mortgage lenders will review the DTI in two different ways. The first way is to consider the home-only ratio. This is also called the Front Ratio.

What this means is the lender will compare the proposed home mortgage to the overall income. In our example above, the front ratio would be calculated as $1,285 ÷ $7,916.67 = 16.23%

NOTE: The home mortgage payment will need to include a proposed amount for annual property taxes and the annual homeowner's insurance policy. Your lender should provide this to you when you request a mortgage estimate.

The other way to view the DTI is the calculation we did earlier, which adds all the debt, plus the proposed mortgage payment, and divides it by the monthly income. This is known as the back ratio.

As previously shown, for the example of this article, this married couple has a DTI of 28.77%

Each type of mortgage loan will have its own rules about the 2 different ratios.

A more thorough discussion below will provide expected DTI ratios for different mortgage loans.

Things NOT Included in DTI Calculations

Now that we have examined how to calculate the DTI ratios, let us look at items that are not covered by the calculations.

The following items generally are ignored when determining a DTI ratio for a mortgage loan

  • monthly utility costs for items like electricity, water, internet, etc.
  • food costs per month, whether dining out or eating at home or some other combination
  • money spent on traveling to work such as subway fees, bus fares, or other similar charges
  • Money spent on entertainment
  • Items deducted from pay for saving or investing to a retirement account
  • Monthly insurance costs for automobiles, accident coverage, or medical coverage
  • Subscriptions to items such as internet-based entertainment (Netflix, Spotify, etc.) or gym memberships, or other similar monthly items.

These items are supposed to be covered by the amount of money remaining from the DTI calculation. That is why the ratios are set up in such a way to ensure the borrower has adequate money left over after paying the mortgage and other debt.

Overlooked Items to Include in DTI Calculations

While it is easy to understand a debt payment like a loan owed on a car or a credit card, some other items are added to the DTI calculations that you may not be considering.

If you are or will be responsible for paying any of the following types of obligations, these items need to be disclosed to your lender to make the correct DTI calculations.

  • Homeowner Association or HOA dues. These dues may be paid yearly or monthly, depending on the neighborhood.
  • Child support due to a divorce decree or other legally binding agreement
  • Alimony or similar spousal payment due to a legally binding agreement.

You may be asked by your lender to provide legal documents to verify the monthly amounts for the above items to get approved for the mortgage.

Different DTI for Different Mortgages

Each kind of mortgage will have slightly different guidelines for their qualifying DTI ratios. Here are some general rules about the major types of home loans.

Conventional mortgage from Fannie Mae or Freddie Mac – These loans will examine the

Front DTI and the Back DTI. The Front DTI should be around 28% and the back DTI should be under 43%

If the borrower has a large down payment or significant cash reserves, the back-end DTI may be slightly higher.

FHA Mortgage – For FHA, the front ratio needs to be no higher than 31% and the back ratio should not be higher than 43%

Like Fannie Mae and Freddie Mac above, it is possible to get approved with slightly higher ratios. But the borrower will need to have substantial factors on their side to get approved for the higher ratios.

VA Mortgage – For the VA loan, only one ratio, which is the back ratio, is considered. The back ratio should not be any higher than 41%.

It is worth noting that the VA mortgage guidelines are strict about their DTI ratios. However, the VA home loan also has the lowest percentage of foreclosed homes as well, so there may be a reason why they stick to these rules.

USDA mortgage – USDA will allow borrowers to have up to 29% on their front ratio and 41% on their back ratio.

One final note to keep in mind when you are talking to your lender; some mortgage companies will have their own mortgage overlooks to work with. Your lender can discuss these overlays with you, but it is important to note that each mortgage underwriter may have a handful of special rules to follow when applying for a loan.

Improving Your DTI Ratios

If you are looking over your finances and realize that you have a bit too much debt to qualify for a home, there are some things you can do to lower your debt-to-income ratios and put you in a better financial position.

The easiest solution is to pay off as much debt as you can. The tried-and-true method of starting with the smallest balance and paying it off, then moving to the next largest balance, will help you to pay down your bills and give you some satisfaction during the process.

Another option is to add to your income. This could be something drastic like looking for a better-paying position at a different company but doing the same work you are doing now. Or it could be as simple as working a few hours of overtime per week at your existing job.

You can also add to your monthly income by taking on a 2nd part-time job. Keep in mind, if you get a part-time job and wish to use that revenue in your DTI calculations, you will need to have the job for a couple of years before the lender will consider the income.

A third idea is to add another person to the loan. FHA, along with Fannie Mae and Freddie Mac, have non occupying co-borrower loan options that allow for a borrower to be on the loan if the borrower does not plan to live in the home. Your lender can provide you with the details for the various types of loans and the down payment requirements for each mortgage. 

Keep in mind that cosigner debt counts against you for the debt-to-income ratio calculation.

Summing Up Debt-to-Income Ratios

The calculations for debt-to-income ratios are rather easy to understand. The most important thing is understanding that both the proposed mortgage payment and any existing debt payments will all play a major role in getting approved for a home loan. By either keeping these ratios low now or working to lower the ratios, you will set yourself up for a better chance at getting approved to purchase a home.

Additional Real Estate Resources:
For a first-time home buyer, the above information is critical in knowing how much home you can afford but there is more to it than just the ratios.

Article from Madison Mortgage Guys -
Written by Luke Skar


Welcome to Sunriver
Sunriver Oregon

Sunriver is a planned residential and resort community on 3,300+ acres located in Deschutes County but Sunriver is essentially self-governing.

The Sunriver Owners Association is a not-for-profit organization directed by a nine-member board of directors. SRAO staff provides functions and duties found in any small-town government, such as administrative services, recreational programming, maintaining facilities, 66 miles of roads, 34 miles of pathways and a variety of community amenities for property owners, their guests, and visitors.

The Sunriver Fire and Police departments are part of the tax based Sunriver Service District, a special service district within Deschutes County's Government.

There are 4 types of developments in Sunriver

Residential Areas- There are 4,175 homesites consisting of privately – owned, single family homes and condominium units.

Recreational Facilities – Located on common areas owned/ administered by the Sunriver Owners Association, these facilities include the Sunriver Homeowners Aquatic and Recreation Center (SHARC), North Pool, numerous tennis and pickleball courts, SROA boat launch, Fort Rock Park, Paulina park, Mary McCallum Park and paved pathways for pedestrians and bicycle riders.

Commercial Development – In addition to Sunriver's commercial core, including The Village at Sunriver, there are churches, Sunriver Nature Center & Observatory, Sunriver airport, Sunriver Fitness and Aquatics and the Marketplace/ Grocery Store/ gas station off Cottonwood Road.

Resort Areas – Privately operated resort properties include the lodge complex, the Woodlands and Meadows golf courses, airport, marina, stables, and other resort-affiliated facilities.

Check out what there is to do in and around Sunriver - A Four Season Recreational Community.


Sunriver Oregon- A Four Season Recreational Community

Sunriver Oregon- A Four Season Recreational Community

About Sunriver Oregon

Sunriver is nestled on 3,300 acres next to the Deschutes River in Central Oregon's High Desert. It is a residential-resort community that featurs year round activities. Below you wfind general descriptions and links as applicable to activities within Sunriver or the surrounding area. A variety of equipment is available for rent from business in in The Village at Sunriver and just outside Sunriver to help you enjoy your favorite sport or activitiy.


Sunriver boasts 34 miles of paved pathways for bicycle and pedestrian use. For safety reasons, rollerblading, skates and skateboards are not allowed on pathways or roads. Please follow Sunriver's pathway rules and respect the delicate vegetation by staying on the pavement. Try the Sun Lava 6 mile paved route to reach Benham Falls and Lava Lands Visitors Center off East Cascade Road near Circle 7. 

Boating, Canoeing, Kayaking, Rafting:

Floating or paddling the Deschutes River can be relaxing, scenic and great excercise. Boats, canoes, kayaks, paddle boards, tubes and rafts are available at area rental shops in the Village at Sunriver and just outside Sunriver. There is a public watercraft launch at Harper Bridge, located on the southwest side of Spring River Road and a tke out just before Benham Falls. Or launch further upstream at Big River Campground and take out at Harper Bridge. (the Harper Bridge launch is suitable for ahnd launching canoes, kayakes, tubes, and rafts only)
Village Bike and Ski rentals, 4 Seasons Recreational Outfitters, Sunriver Toy House

Disc Golf: 

Sharc has a disc golf course available free to owners with a valid SROA Member Preference ID card, SROA Recreation Plus cardholders and is included with SHARC daily admission. Disc golf aloine is $5


Anglers can find all the fishing challenges they would like on nearby rivers and lakes. Fishing seasons are variable, so check local regulations. Guided trips can be arranged through local outfitters. 
The Hook , Sunriver Fly Shop


Two 18 hole courses - Woodlands and Meadows are operate by Sunriver Resort. 541-593-1000

Horseback Riding:

Sunriver Resort's stables offers scenic trail rides. the stables are located along River Road in Sunriver. 541-593-6995

Nature Center and Observatory:

The Sunriver Nature Center & Oregon Observatory is a nonprofit scientific and educational organization. It includes interpretive exhibits, educational programs, a botanical garden, nature trail, observagtory, live raptros and other critters. The observatory offers seasonal night sky and solar viewing. 

Newberry National Volcaninc Monument:

Sunriver sites in the middle of the Newberry National Volcanic Monument, which includes Lava Lands Visitor Center on Lava Butte, Lava River Cave, Lava Cast Forest and the Newberry craters a Paulina and East Lakes. 

Parks and Playgrounds:

Fort Rock Park is located between circles 4 and 11 on East Cascade Road and provides recreatinal facilities for softball, basketball, volleyball and horseshoes. There is also a playground, pickleball an dtennis coures. A pavillion is available for picnic/ barbecue events. 

Paulina Park is located at SHARC. Featuyres picnic tables, grassy area, bocce ball court, rock climbing wall and restrooms. A picnic pavillion is available for rent. Reservations are required. 541-585-3144

Mary McCallum Park is located on the river adjacent to the Marina. This park is restricted to use by Sunriver property owners only. It offers picnic tables, barbecues and a small covered pavillion. For reservations, contact the SROA office Monthday through Friday at 541-593-2411

Pool/ Swimming:

The Sunriver Owners Association owns/ operates the SHARC aquatics facility and North Pool. SHARC includes indoor/ outdoor pools, lazy river, water slides, events center, outdoor amphitheater, park and winter tubing hill. The North Pool is only available to owners and open through the summer months.

Tennis- Pickleball:

SROA owns and maintains 24 outdoor tennis and 6 picleball courts. Equipment rentals are avaiable at Tennis Hill at Fort Rock Park, Memorial Day through Labor Day.

The Village At Sunriver:

The Village features shopping, dingin, seasonal ice skating, bumper cars, bounce house playgrounds, mini golf, events and more.

Winter Fun:

There is ice skating in the the Village, tubing at SHARC and miles of pathways for crosscountry skiing and snowshoeing.

Skiing, Snowboarding, Sledding:

Some of the finest downhill skiing around is available just 30 minutes away at Mt. Bachelor. Equipment rentals and Snow Park permits are available at various locations in the Village. 


Fun Facts about Sunriver, Oregon

Did you know?

1. The anme Sunriver was selected by developers John Gray and Donatld V. MCallum in 1968

2. Sunriver is located on the grounds of the former Camp Abbot, a World War II training facility designed to rain combat engineers in a simulated combat environment. The U.S. Army camp opened in 1942, but by June 1944, the camp was abondoned and most of the settlement was razed.

3. Sunriver was also the site of the pioneer Shonquest Ranch. Sunriver post office was established on Jyly 18, 1969, at the same time the public facilities were opened.

4. All of Oregon has NO sales tax.

5. Oreogn is one of the only two states where you can't pump your own gas (New Jersey being the other)

6. Permanent population of approximately 1,700 though during high peak season it may increase to upwards of 20,000

7. This region experiences warm (but not hot) and dry summers, with no average monthly temperatures above 71.6 degrees F. According to the Koppen Climate Classification system, Sunriver has a warm-summer Mediterranean climate, abbreviated "Csb" on climate maps.

8. Sunriver airport is a public use airport located one nautical mile (2 km) west of the central business district of Sunriver. It is privately owned by Sunriver Resort, L.P. This airport is included in the national Plan of integrated Airport Systems for 2011-2015, which categorized it as a genearal aviation facility.

9. We have an Observatory which is an astronomical observatory operated by the not-for-profit Sunriver Nature Center & Observatory in Sunriver, Oregon. The observatory has 11 telescopes. In July 2012, the observatory was renamed the Oregon Observatory at Sunriver.

10. Elevation is at 4,164 ft

11. Sunriver has over 35 miles of paved bike paths.

12. Average commute time in 32 minutes. The National Average is 25 minutes to Bend.


12 Facts To Learn About Sunriver Oregon

Sunriver Oregon

Did You Know?

  1. The name Sunriver was selected by develpers John Gray and Donald V. MCallum in 1968.

     2. Sunriver is located on the grounds of the former Camp Abbot, a World War II training facility designed to train combat engineers in a simulated combat environment. The U.S. Army camp opened in 1942, but by June 1944, the camp was abandoned and most of the settlement was razed.

      3. Sunriver was also the site of the pioneer Shonquest Ranch,  Sunriver post office was established on July 18, 1969, at the same time the public facilities were opened.

       4. Sunriver and all of Oregon has no sales tax.

       5. Oreogn is one of the only two states where you can't pump your own gas (New Jersey being the other).

       6. Permanent population of approximately 1,700 though during high peak season it may increase to upwaards of 20,000.

       7. This region experiences warm (but not hot) and dry summers, with no average monthly temperatures abouve 80 degrees F. According to the Koppen Climate Classification system, Sunriver has a warm-summer Mediterranean climate, abbreviated "Csb" on climate maps.

       8. Sunriver airport is a public use airport located one nautical mile (2 km) west of the central businesss district of Sunriver. It is a privately owned by Sunriver Resort, LP. this airport is included in the National Plan of Integrated Airport Systems for 2011-2015, which catergorized it as a general aviation facility.

       9. Sunriver Observatory is an astronomical observatory operated by the not-for-profit Sunriver Nature Center &Observatory in Sunriver, Oregon. the observatory has 11 telescopes. In July 2012, the observatory was renamed the Oregon Observatory at Sunriver.

       10. Sunriver's elevaton is at 4,164 ft (1,269.2m.)

       11. Sunriver has over 35 miles of paved bike paths.

       12. Average commute time is 32 minutes. the Ntional Average is 25 minutes in Bend.


Why is NOW the BEST Time to Sell Your Sunriver Home?

Best time to sell your Sunriver home

If you are thinking of selling your Sunriver home now is the time. This is one of the strongest sellers real estate markets we have ever seen in Sunriver, there is huge financial gains to sellers cashing in on the rising equities in their homes. So why is today any different than other times of being told it was a great time to sell?

The speed of today's real estate market is causing buyers to write offers sight unseen, to offer thousands of dollars above list price, to waive contract contingencies like appraisals and inspections, and to woo the seller in creative and unique ways. That is why if you are thinking at all about selling, the tremendously low inventory of homes for sale right now, along with the huge buyer demand and cash buyers, is pushing up home prices to offer opportunities for home seller's.

What is driving the current seller's real estate market?

A seller's market means that there are more buyers than there is inventory, pushing the price of real estate up.

The real estate market measures "inventory" in terms of time on the market by comparing the ratio of active listings to pending sales as of the end of the month. This ratio gives us a turnover calculation, showing how long it will take for the current inventory of homes to sell. A real estate market is deemed to be a sellers' market when there is less than 5 months of inventory.

We can't predict how long this market will continue, if you are thinking of selling your home, don't wait and miss out on the market opportunity to sell for top dollar.

What is driving this seller's market?

Increased home buyer demand due to historically low interest rates, increased demand from buyers due to economical circumstances, and low invnetory of homes pushing sales prices higher and higher.

If you would like to know what your home is worth in today's market just enter your address here on my website or call or text me at 541-815-0906 or


Sunriver Real Estate Market Update February 2020

Wed Feb 24 2021
This week the median list price for Sunriver, OR 97707 is $1,175,000 with the market action index hovering around 77. This is an increase over last month's market action index of 75. Inventory has held steady at or around 6. Click here to stay informed with the Sunriver market!

Market Action Index

This answers "How's the Market?" by comparing rate of sales versus inventory.


In the last few weeks the market has achieved a relative stasis point in terms of sales to inventory. However, inventory is sufficiently low to keep us in the Seller's Market zone so watch changes in the MAI. If the market heats up, prices are likely to resume an upward climb.

Real Estate Market Profile Sunriver

If you would like to know about what the Sunriver real estate market is doing give me a call at 541-815-0906 or email at

See the real estate market report for last month here.

Search all homes for sale in Central Oregon at

Information provided by First American Title.


Top Ten Sunriver Summer Activities
Sunriver Summer Fun

Sunriver Oregon is a place for families with something for everyone to do and enjoy regardless of age. It is a place where you can get away from a busy schedule, spend quality family time and reflect on what is important. If you are a Sunriver visitor, you can enjoy the same amenities that lured homeowners to this special place. Below are the top ten summer activities that you and your family might enjoy in and around Sunriver.

  1. Sunriver Paved Bike Paths 

    offer 34 miles of paved adventure awaits. The favored vehicle for getting around in Sunriver is a bicycle. Most vacation homes come stocked with cruisers or three speeds, some even include smaller bikes for kids. If you come to Sunriver you can rent everything from tandems to tag-along trailers at four area bike rental shops in Sunriver.

               Village Bike & Ski
               4 Seasons Recreational Outfitters
               Sunriver Resort Bike Barn
               Sunriver Sports

               For the safety of all riders & pedestrians enjoy the paved pathway but keep the rules in mind.


  1. Sunriver Homeowners Aquatic & Recreation Center (SHARC)

    is a year-round aquatic, outdoor aquatics are open from Memorial Day through September. The SHARC center available to day visitors as well as Sunriver vacationers. The facility features indoor lap pool, whirlpool, kids play pool, hot tub, outdoor pool, lazy river, two water slides, event space, outdoor basketball court, disc golf, winter tubing hill, Paulina park, and disk golf.

  2. The Village at Sunriver

    offers something for everyone, coffee & pastries, craft beer, great restaurants, boutique shopping, art gallery, outdoor recreation rentals, family entertainment, events and much more! The Village at Sunriver is an outdoor open-air mall nestled among the pine trees. Many local family-owned businesses have called Village at Sunriver home since 1974.

  3. Sunriver Marina

    Floating the Big Deschutes River in the summer is so refreshing and relaxing. There are several rental companies in the area that will rent floating devices
  4. Sunriver Nature Center and Observatory

    explore nature and seek the stars all in one place. A visit to Sunriver is not complete without a stop here.


  1. High Desert Museum

    is a unique museum full of natural world and cultural history of the West's High Desert region through artful exhibits, alluring animals, engaging programs, and meaningful history. The museum is located just 10 minutes north of Sunriver on Highway 97.

  2. Lava Caves

    is a-mile-long lava tube that is self-guided and takes about 1.5 hours to tour the entire cave.

  3. Sunriver Stables

    is the perfect place to saddle up for adventure. Enjoy guided trail rides, lessons, and pony rides for ages 2-6.

  4. Sunriver Resort Golf Courses

    are a golfer's paradise, Sunriver golf courses are the ideal choice for a golf vacation. Sunriver offers 63 holes of the best golf in the west, these courses are challenging enough for golfers of all skill levels.

  5. Sage Springs Spa in Sunriver  

    is a full-service spa with many services.

Being a Sunriver home owner does have it's advantages, see what the Benefits fo Being a Sunriver Home Owner would be.

Disclaimer: All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information on this site was last updated 02/01/2023. The listing information on this page last changed on 02/01/2023. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of COAR/MLSCO (last updated Wed 02/01/2023 10:41:33 AM EST). Real estate listings held by brokerage firms other than CENTURY 21 Cascade may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. All rights reserved.
© 2020 Oregon Datashare (KCAR | MLSCO | SOMLS). All rights reserved. The data relating to real estate for sale on this web site comes in part from the Internet Data Exchange Program of the Oregon Datashare. Real estate listings held by IDX Brokerage firms other than (insert company name) are marked with the Internet Data Exchange logo or the Internet Data Exchange thumbnail logo and detailed information about them includes the name of the listing Brokers. Information provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties the viewer may be interested in purchasing. The consumer will not copy, retransmit nor redistribute any of the content from this website. Information provided is deemed reliable, but not guaranteed.

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Agency License Information: Licensed in the State of Oregon

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