Debt-to-income (DTI) ratio determines what mortgage you’re eligible for. So before getting pre-approved, your mortgage advisor will review your income and debts to help you understand where you currently stand.
In this article, we’re going to look at what a debt-to-income ratio is and what to expect when you apply for a mortgage so that you’ll be prepared when you start househunting.
What is Debt-To-Income Ratio?
The debt-to-income ratio compares a borrower’s monthly debt payments to their monthly gross income. When someone applies for a home loan, lenders use the ratio to help determine their ability to repay monthly payments and accumulate additional debt.
When you apply for a home loan, you’re required to meet maximum DTI
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