Debt-to-Income Ratio

(redirected from DTI Ratio)

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 ?
And when they see that the DTI ratio has been exceeded, the lender will probably have to take the loan back.
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%.
Tighten the DTI ratio requirement to more accurately reflect the borrower's debt repayment ability
Korea's DTI ratio was higher than major countries, including the U.
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.
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.
1) We find that the DTI ratio at the time of origination is not a strong predictor of future mortgage default.
The average DTI ratio for such a denial in February was 27/43.
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.
Until that time, a large number of loans will qualify as QMs without meeting the 43 percent DTI ratio.
A broader measure of debt burden is the overall DTI ratio, which includes mortgage and non-mortgage debt in the numerator.
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.