Debt-to-Income Ratio

(redirected from Debt to Income Ratios)

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 ?
The Bank is now pushing ahead with a desire to implement debt to income ratios, but the government has asked for more information.
We have concerns that blanket debt to income ratios will exclude even more first time buyers from getting into a home.
Adjusted for the lower level of homeownership rates among this income group, mortgage debt to income ratios increased more for these lower income groups than for the $50,000 to $100,000 income group.
For example, households with incomes between $50,000 and $100,000 increased their rates of aggregate mortgage debt to aggregate income by about one-sixth and their corresponding consumer debt to income ratio by roughly 50 percent.
Debt to income ratios that would limit the amount a home buyer could borrow to 4.