Within mortgage lending, the amount of monthly debt you have versus your income is one of the primary focuses when obtaining a loan. This is the debt to income ratio (DTI) of your loan and will be a determining factor of approval or denial.

For example, if you make $4,000 a month and have debt that includes a $1,000 mortgage payment and a $500 car loan payment, you will have a debt-to-income ratio of 37.5%. So, the calculation we made for that was $1,500 (your total recurring monthly payment for debts) divided by $4,000 (your gross monthly income).

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$6,000 (gross monthly income) $2,000 (monthly debt) = 33% debt-to-income ratio You can use our affordability calculator to help you determine your DTI. Contact us with any questions.

Your debt-to-income ratio is more than 50%. You have too much debt and need to find ways to reduce your debt immediately. Call us at to let a certified credit counselor assess your budget and provide options that can get you debt relief .

Mortgage lenders/companies consider 2 ratios – Housing Ratio and Mortgage Debt Ratio (Mortgage Income to Debt ratio or Mortgage Debt to Income ratio) before they offer you the loan.

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Why Your Debt-to-Income Ratio Matters. Debt-to-income is among the most important factors lenders use to evaluate loan applicants. For lenders, your debt-to-income ratio is a reliable indicator of your ability to repay a new loan in a timely fashion.

Otherwise, your debt-to-income ratio will be higher – and your chances of getting a mortgage will be lower – because you’re adding new debt to your plate while your income stays the same, Fleming says.

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The “debt-to-income ratio” or “DTI ratio” as it’s known in the mortgage industry, is the way a bank or lender determines what you can afford in the way of a mortgage payment. By dividing all of your monthly liabilities (including the proposed housing payment) by your gross monthly income, they come up with a.

Calculator Tips What is a Debt-to-Income Ratio? Lenders use your DTI ratio to evaluate your current debt load and to see how much you can responsibly afford to.

Debt to income ratio (DTI) is the amount of monthly debt payments you have. mortgage lenders use this number to determine how much they're willing to lend .