The Loan Application: Total Debt

Your total debt, also known as your debt load, affects your credit rating. Your loan officer will also want to review your debt load from another angle; how much of your monthly income do you spend on regular debt payments. This number is called your debt-to-income ratio, sometimes abbreviated as DTI.

When figuring out how much money you can afford to borrow, your loan officer needs to consider the total amount you pay toward debt every month. This includes all types of consumer debt -- even so-called "good debt," like student loans.

When your monthly debt payments are combined with your projected mortgage, insurance, and tax payments, the total should be less than 36% of your pre-tax income. If it's more than this amount, your loan officer may encourage you to pay down your debts, or aim for a less expensive home purchase.