Debt-to-Income Ratio

(redirected from Debt To Income Ratio)
Also found in: Acronyms.

Debt-to-Income Ratio

The amount of an individual or company's gross income that it spends on debt service as a percentage of its total gross income. The higher the DTI is, the less likely it is that the individual or company will be able to repay debt. As a result, financial institutions use the DTI in informing decisions on whether or not to make loans. Often, the "debt" in the term refers to all liability payments (such as employee wages, taxes, and utility bills) and not simply to debt.
References in periodicals archive ?
This compared with a debt to income ratio - also known as a debt stress level - of 13.
When a property seller or a nonprofit has paid a homebuyer's consumer debts in order to meet debt to income ratios, the mortgage credit approval of such a borrower would not be considered by FHA to be acceptable underwriting.
It should be noted that although the mortgage debt to income ratio increased just 7 percentage points for households earning less than $25,000, compared with 10 percentage points to 11 percentage points for households earning $25,000 to $100,000, homeownership rates are much lower among this segment of the population.
The AlterNet program was established primarily for the purchase of mortgage loans made to borrowers that may have imperfect credit histories, higher debt to income ratios or mortgage loans that present certain other risks to investors.