In addition to your job history and credit, lenders will consider another major measure of financial health: debt-to-income ratio, or DTI. Your debt-to-income ratio is a measurement lenders use to find out how much of your income goes toward paying off debt every month. It considers all your monthly debt payments in comparison to your gross monthly income, and is expressed as a percentage. How to Calculate Debt-to-Income RatioTo calculate your debt-to-income ratio, start by adding up all your monthly debt obligations. Types of Debt-to-Income RatiosGenerally, the equation above gets you your general debt-to-income ratio.

Source: Forbes October 05, 2020 13:07 UTC