% DTI, as it applies to getting approved for a mortgage, has two calculations: 1) the monthly cost of the new mortgage as a percentage of your gross monthly income, (called front end ratio) and 2) the monthly cost of the new mortgage plus the monthly cost of other debt including cc's, auto loans, student loans etc. This second calculation is the back end ratio.
The costs that go into figuring the front end ratio are: principal and interest payment, real estate taxes, hazard insurance, and mortgage insurance (if applicable). If the property has an HOA or Condo maintenance fee, then that fee is used in the calculation too. The maximum allowed ratio for the front end depends upon the loan type. FHA max is about 46.99% but that is no where near ideal. For an ideal file the front end ratio should be much less. Conventional loans the lenders prefer less, 28% to 36% is common.
The costs that go into the back end ratio are all of the figures for the front end plus your cc monthly minimum payments, auto payments, student loan payments, child support or alimony, and installment loan payments, and any other debt you have (not utilities or phone). The max ratio allowed for the back end on a FHA is 56.99% of your monthly gross income. Again that is not at all ideal, and you probably would have to have other compensating factors to allow a back end ratio that high. Conventional loans the max back end is 45% of your gross monthly income.
These maximum ratios can be less depending upon the individual funding lender.
So HYPA$$33, did you just graduate school and are now working or have you been working in your industry for more than two years? Your scores are fine for an FHA loan and even a conventional loan (but the MI would be higher since your mid score is less than 720).
It looks like you might be in very good shape for a score increase once the cc's age a little bit.
