Financial
Debt-to-Income Ratio (DTI)
The percentage of your gross monthly income that goes toward paying debts, including your future mortgage payment, car loans, student loans, and minimum credit card payments. Lenders use DTI to measure your ability to manage monthly payments. Most mortgage programs require a DTI below 43%, though some allow up to 50%. For example, if you earn $6,000 per month and your total debts are $2,400, your DTI is 40%.
Why It Matters
Debt-to-Income Ratio (DTI) directly affects how much you pay for your home and how you build wealth through homeownership. Understanding the financial mechanics of your mortgage helps you make choices that save money over the long term.
Use mortgage calculators to see how debt-to-income ratio (dti) impacts your specific numbers. Even small differences in financial terms can add up to tens of thousands of dollars over the life of a 30-year mortgage.