DTI

DTI, or Debt-to-Income ratio, is a financial measure that compares your monthly debt payments to your monthly gross income. It helps lenders assess your ability to manage additional debt, like a mortgage. To calculate it, add up your monthly debt payments—such as loans, credit cards, and car payments—and divide that total by your gross monthly income. A lower DTI indicates you have a healthier balance between debt and income, making you more likely to qualify for loans and favorable interest rates. Typically, lenders prefer a DTI below 43%, though standards may vary.