What is Debt-to-Income Ratio?
Debt-to-income (DTI) ratio compares a borrower’s monthly debt payments to their gross monthly income. It is a key factor in determining mortgage eligibility.
How Debt-to-Income Ratio Works
Lenders calculate DTI by dividing total monthly debts by gross monthly income. A lower DTI shows that the borrower has more income available to handle new debt, improving chances of approval.
Benefits of Understanding Debt-to-Income Ratio
Knowing your DTI helps you plan for homeownership and manage your finances responsibly. Borrowers with low DTI ratios often qualify for better loan programs and interest rates.
Capstone for Mortgage Education and Mortgage Training Classes
At Capstone Institute, we train students to calculate and explain DTI ratios clearly to clients. Our mortgage education classes prepare professionals to guide borrowers toward successful mortgage approval.