The Debt-to-Income Ratio

The Debt-to-Income (DTI) ratio is a financial measure that compares your monthly debt payments to your gross monthly income. It helps lenders assess your ability to manage additional debt, such as a mortgage or loan. A lower DTI indicates you have a manageable level of debt relative to your income, making you more likely to qualify for loans. Generally, a DTI below 36% is considered good, though specific thresholds can vary by lender. This ratio provides a clear picture of your financial health and debt repayment capacity.