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Debt to Income and Your Home Loan Ability

Your debt-to-income (DTI) ratio is a key component of whether or not you qualify for a mortgage loan. This ratio measures your monthly debt payments divided by your monthly income. This number shows how much of your income is tied up in paying debts and can also be used to predict how well you can manage those payments in the future.

A reasonable DTI ratio, including rent or a mortgage payment, is 36% or less. This number is the total of your fixed monthly expenses (rent/mortgage, credit card bills, auto loans, student loans, child support, etc. (not including utilities)), divided by the total of your monthly income.

Gross Monthly Income
Salary                    
Spouses salary 
Child/Spousal support 
Bonuses 
Other income 
TOTAL INCOME 
Monthly Debt Payments
Rent or mortgage                    
Auto payment 
Credit cards 
Child/Spousal support 
Student loans 
Other 
TOTAL DEBT 
Total debt            Total Income        

Debt-to-Income Ratio (total debt/total income)

   

Published Apr 28, 2014.