Debt-to-Income Ratio

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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.

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And when they see that the DTI ratio has been exceeded, the lender will probably have to take the loan back.

Error increases might spell trouble ahead in mortgage market

Fitch has accounted for the aggregate debt position when estimating the borrower's debt-to-income (DTI) ratio, resulting in a higher-than-market average DTI ratio for UBLs of approximately 60%.

Fitch Rates Fondo de Titulizacion, RMBS Prado V 'AA+(EXP)sf'

Tighten the DTI ratio requirement to more accurately reflect the borrower's debt repayment ability

Policy Issue

Korea's DTI ratio was higher than major countries, including the U.

Rules on mortgages toughened

QM standards also include a 3 percent limit for points and fees; a maximum term of 30 years or less, and a cap of 43 percent on the back-end DTI ratio, among other requirements.

Housing market overview: challenges to the housing recovery

76) According to industry regulators, a borrower's DTI ratio is a crucial consideration in making a loan because it determines whether sufficient income remains for living expenses.

Ability to repay: mortgage lending standards after Dodd-Frank

1) We find that the DTI ratio at the time of origination is not a strong predictor of future mortgage default.

Reducing foreclosures: no easy answers

The average DTI ratio for such a denial in February was 27/43.

Ellie Mae Releases First Origination Insight Report

Since Fitch's model was developed using a debt-to-income (DTI) ratio, in its analysis, Fitch mapped the DTR to a DTI ratio of comparable credit risk.

Fitch Expects to Rate Angel Oak Mortgage Trust I, LLC 2017-3; Presale Issued

Until that time, a large number of loans will qualify as QMs without meeting the 43 percent DTI ratio.

Tripwires for litigation

A broader measure of debt burden is the overall DTI ratio, which includes mortgage and non-mortgage debt in the numerator.

Why did young families lose so much wealth during the crisis? The role of homeownership

The Korean government announced on August 29, 2010 a temporary relaxation of DTI ratio regulations for mortgage loans in order to stimulate the depressed housing market.