 TITLE: 5 Homebuying Myths Debunked CONTENT: Myth #1: I Have Too Much Debt\n-----------------------------\nBefore a mortgage lender gives their stamp of approval, they'll want to make sure your monthly budget can easily absorb your new mortgage payment. They rely on something called your debt-to-income ratio (DTI) to help make this determination. DTI is a snapshot of how much of your monthly income goes toward debt payments, such as student loans, credit cards, personal loans and auto loans.\nSome potential homebuyers may be afraid they have too much debt to qualify for a mortgage—but your debt on its own isn't the most important detail: It's how it relates to your income that matters. If your monthly income allows you to easily pay your debts with plenty left over, a high amount of debt may not be a dealbreaker. That's where DTI comes in.\nTo calculate your DTI, tally up all your monthly debt payments and divide the total by your gross monthly income before taxes (not your take-home pay). Multiply that final number by 100 to see your DTI ratio expressed as a percentage. If yours is under 43%, it may be low enough to qualify for a mortgage, though some lenders prefer a DTI as low as 36%. If your DTI tops 43%, see if it's possible to pay down credit cards or other debts to help you qualify. END