Free primer: how DTI actually works. Calculator: front-end vs back-end. Paid steps below assume you are 2–8 points over a ceiling and a pre-approval is the point of the next quarter, not a vibe.
Do this in order
Pull the credit report the lender will use (not only Credit Karma). Write every monthly payment they will see. If a closed installment still shows a payment, dispute or wait — DTI uses the line, not your memory.
Rebuild the fraction with gross documented income only. Overtime and bonus need two years. A job under 30 days is a stall, not a raise. Side-gig Schedule C needs returns, not Venmo screenshots.
Ask the loan officer which student-loan rule they will run. IDR billed amount vs 0.5% of balance vs $0 treated as $0. Get it in writing. Plug the harsher number into the calculator so the file cannot surprise you.
Rank debts by payment per dollar to kill, not APR. A $9,000 car at $310/month is usually a better DTI kill than a $4,000 card at $90. Avalanche still wins for lifetime interest; DTI is a different game. Do not raid the emergency fund below three months of essentials.
Do not pause the 401(k) match to look richer on paper. Pretax deferrals are not in the numerator. They also are not in the income most underwriters start from if they use W-2 box 1 — confirm whether they will add deferrals back. Keep the match; see never skip the match.
Pay to $0, then wait for the report to update before you apply. A payoff letter helps; a still-reporting $310 car payment does not. Authorized-user cards can lift score; they do not add the other person’s income.
If you are inside FHA 43% but over conventional 36%, decide the program on purpose. FHA mortgage insurance is a cost, not a personality. Run the payment with MI vs waiting 90 days to kill the car and going conventional.
Compensating factors to document, not to invent: 2+ months PITI in reserves after closing, 740+ score, leftover residual income, a 0x30 housing history. These help automated underwrite stretch. They do not replace a payment that is 50% of take-home.
If VA: residual-income charts by region and family size can pass a file that looks “high DTI.” Bring the LES, the child-care number, and the residual worksheet — do not argue the 41% guideline in a vacuum.
Hard-stop list before you write an offer: new car, new card, furniture store financing, co-signing, a job hop, a large unexplained deposit. Any of those can reopen underwriting. Freeze borrowing until the clear-to-close.
If you are more than ~6 points over the ceiling after the payoff math, wait. Stretching DTI to “get in” is how a rate lock dies and a house becomes a second job. The down-payment stack is the other half of this file.
One-page decision
Kill the largest monthly payment you can cash-flow without draining reserves. Document student loans at the rule the file will actually use. Keep the match. Apply only after the credit report agrees with the spreadsheet. If conventional still fails and FHA is the only door, price the MI — do not treat it as free stretch.