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.
References in periodicals archive ?
Global Banking News-November 23, 2017--NZ banks unhappy with central bank's proposed debt-to-income ratio tool
Professor O'Neil warns that if the consumer debt-to-income ratio reaches 20%, your finances are considered to be in the "danger zone.
That's especially true if you don't quite fit the mold -- you don't conform to all the underwriting mandates on credit, income, debt-to-income ratio and other criteria.
Consequently, their corresponding debt-to-income ratios, which determine the ease with which they will be able to repay their student loans, will differ.
To calculate your debt-to-income ratio, divide your total recurring debt by your gross income.
The lending community has made strides to improve its services and products in large part by lowering credit standards and raising allowable debt-to-income ratios.
higher loan-to-value (LTV) and debt-to-income ratios;
These loans have even higher debt-to-income ratios than a typical high loan-to-value mortgage and a three-year subsidy buy-down that reduces the initial interest rate as much as 1.
Meanwhile, the debt-to-income ratio has nearly doubled, reaching a record of almost 1.
The UK household sector debt-to-income ratio has continued to rise rapidly, increasing households' vulnerability to any unexpected rises in interest rates or falls in incomes," warned the Review.
The UK household sector debt-to-income ratio has continued to rise rapidly,increasing households' vulnerability to any unexpected rises in interest rates or falls in incomes,'' warned the Review.
When income levels were taken into account men also had higher levels of borrowing, with an average debt-to-income ratio of 16.