US EditionWhat Is Debt-to-Income Ratio and How Does It Affect You?
- Debt-to-Income ratio measures the percentage of monthly pre-tax income spent on debt and housing payments and impacts loan affordability decisions by lenders.
- DTI is calculated by dividing total monthly debt and housing payments by monthly pre-tax income, with examples showing a 50% ratio from $2,500 debt on $5,000 income.
- Lenders generally prefer a DTI of 36% or lower as healthy, while a DTI over 43% is considered high and can increase loan risk or lead to higher charges.
- Typically, a debt-to-income ratio of around 35% is acceptable to most lenders, provided other criteria are satisfied, while some home equity lenders may allow ratios up to 50%.
- When DTI exceeds 43%, borrowers should consult mortgage advisors to explore options like debt consolidation, refinancing, paying down debt, or increasing income to improve eligibility.
Insights by Ground AI
Does this summary seem wrong?
26 Articles
26 Articles
All
Left
Center
24
Right
What is debt-to-income ratio and how does it affect you? | News Channel 3-12
What is debt-to-income ratio and how does it affect you? You don’t need a finance degree to have money smarts. Understanding a few simple terms can help you lead your best financial life. One of those terms is DTI, or debt-to-income ratio. It’s an important concept because lenders use DTI to determine whether you can afford the loan you want. Achieve says understanding your DTI can give you an important edge when you’re looking for a home equity…
Coverage Details
Total News Sources26
Leaning Left0Leaning Right0Center24Last UpdatedBias Distribution100% Center
Bias Distribution
- 100% of the sources are Center
100% Center
C 100%
Factuality
To view factuality data please Upgrade to Premium
Ownership
To view ownership data please Upgrade to Vantage
