Debt Ratios Explained: What Utah Homebuyers Need to Know Before They Buy

If you're thinking about buying a home in Utah, chances are your lender will talk to you about your debt ratios.

They sound complicated, but they’re actually pretty simple—and they can make a big difference when it comes to what you qualify for and how confident you feel while house hunting. (And if you ever feel like lenders are speaking a different language, we actually broke down all the Real Estate and Mortgage Lingo in plain English too.)

Let’s break it down in a way that actually makes sense, with a real example and no confusing finance-speak.

What Is a Debt Ratio?

When you apply for a mortgage, your lender wants to know how much of your income is already tied up in monthly payments. That’s what a debt ratio tells them.

There are two kinds:

• Front-End Ratio: This is just your housing costs—mortgage, property taxes, homeowners insurance, HOA fees—divided by your gross monthly income.

• Back-End Ratio: This includes everything—housing costs plus credit cards, car loans, student loans, and any other monthly debt payments.

I always tell my clients: your ratios help the lender see if your payments are comfortable or stretched too thin. It's not about being perfect—it's about finding what works for you.

How to Calculate Yours

It’s easier than it sounds.

Take your gross monthly income (before taxes) and divide your debt payments by that number.

Example (Realistic for Utah Buyers)

Let’s say you make $6,000/month.

Your future home in Davis County comes with a $2,400 monthly payment (mortgage, taxes, insurance).

You also pay $450 for a car and $250 for student loans.

✅ Front-End Ratio: $2,400 ÷ $6,000 = 40%
✅ Back-End Ratio: $2,400 + $450 + $250 = $3,100 → $3,100 ÷ $6,000 = 51.6%

That might sound high, but depending on the loan, you could still qualify. This is why it's so important to run your numbers before assuming you're out of the game.

What’s a “Good” Debt-to-Income Ratio?

It depends on your loan type and full financial picture. Here’s what I’ve seen working with buyers across Utah:

So yes—you can buy a home in Utah with higher debt ratios, especially with strong income or the right loan fit. I've personally helped VA buyers close with ratios up to 65% and still keep their monthly budget comfortable. 

Why It Matters When Buying a Home in Utah

• It affects how much home you can afford.

• It’s a big part of getting pre-approved.

• It helps you know if you’re shopping in the right price range.

I've seen buyers feel totally discouraged by a number—only to find out they were still well within qualifying range. Don't guess. Let’s actually look at it together.

(Having a local agent who really knows the ropes makes a huge difference here. Here’s why experience matters so much when you’re buying in Utah.)

How to Improve Your Ratios (If You Need To):

• Pay down credit cards or small loans.

• Avoid financing large purchases before applying.

• Add income if possible (side work counts!).

• Work with a lender who understands what’s possible and doesn’t just look at the numbers in black and white.

Understanding your debt ratio doesn’t have to be stressful—it’s just one piece of the puzzle. I’ve had plenty of buyers who thought they wouldn’t qualify, and once we looked at the numbers together, they realized they were actually in a great spot.

If you’re not sure where your ratios land or just want someone to talk it through with, I’m always happy to help—judgment-free and in plain English. This is exactly the kind of thing we do at Utah Home Vibes: helping you make smart, confident Real Estate moves without all the pressure.

And if you don’t have a lender yet, I can connect you with someone I trust—someone who takes the time to explain things and makes you feel taken care of.