What is a debt to income ratio?

Debt to Income Ratio (DTI) The debt-to-income ratio, sometimes called the back ratio, is the percentage of your gross income that you can spend on housing plus debt payments. This ratio varies by loan product, but it’s often in the 41%-50% range.

• Example: Gross Income $5500/month

• Other Debt $600 per month (car, student loans, credit cards)

• Mortgage payment from prior slide $1500/month

• $600 + $1500 = $2100 total debt/$5500 gross income = 38.18% DTI