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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References in periodicals archive ?

In order to be qualified for FHA Journal loan for your home, you need to meet the criteria set by FHA's debt to income ratio (DTI) that requires your DTI ratio to be 43% or lesser than your monthly gross income.

FHA Journal to Process House Loan Applications Now

Fannie Mae's current maximum total DTI ratio is 36% of the borrower's stable monthly income.

What You Need To Know About Changing Debt-To-Income Ratio, Mortgage Qualifications

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 Rates Angel Oak Mortgage Trust I, LLC 2018-1

- 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.S.

Rules on mortgages toughened

(90) It did not include a requirement to consider the consumer's DTI ratio or residual income.

The exception that ate the rule: why QRM should not equal QM

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

We first study the "affordability" of a mortgage, typically measured by the DTI ratio, which is the size of the monthly payment relative to the borrower's gross income.

Reducing foreclosures: no easy answers

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 2018-1; 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.