Debt to Income Ratio:

Saturday, November 8, 2008



Debt to income ratio is also called DTI. Debt to Income Ratio means the percentage of gross income of the consumer that he uses to pay his debts. This is one of the most important factors that a lender or a lending institute checks before approving a loan or mortgage. If your debt to income ratio is less then 36 percent then you have a very good chance to get approve for a loan program with affordable rates and terms.

There are other factors also which a lender checks before approving the loan but it certainly help if you have a lower debt to income ratio. Like, for FHA loan, your DTI ratio should be between 28 to 36 percent.

How to Calculate Debt to Income Ratio:

Calculating a Debt to income ratio is not time consuming or difficult task. Just calculate all your monthly debts, mortgage expenses, home insurance and divide it with your gross monthly income. But don’t count your expenses towards utilities food, entertainment.

1 comments:

abcd November 8, 2008 at 3:22 AM  

Hi Dear, this is a post as nice as you.. It seems that you are very good on this topic..I want a small suggestion from you.. My DTI is 34%. So can you suggest me some ways through which I can qualify for a Mortgage? Will wait for your reply..

Thanks...

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