Debt-to-Income Ratio
The percentage of a buyer's gross monthly income (what he earns before tax deductions) that goes towards paying off debt.
Debts can include car payments, credit card bills, child support payments and student loans.
Conventional loans will allow for up to 45% DTI and FHA loans will allow for up to 42% DTI. The lower a borrower's DTI, the better qualified she is to get a mortgage loan.
The percentage of a buyer's gross monthly income (what he earns before tax deductions) that goes towards paying off debt.
Debts can include car payments, credit card bills, child support payments and student loans.
Conventional loans will allow for up to 45% DTI and FHA loans will allow for up to 42% DTI. The lower a borrower's DTI, the better qualified she is to get a mortgage loan.
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