Did you know that when you apply for a loan, lenders are looking at your total monthly debt and income? This is your debt to income ratio (DTI) and it measures your ability to repay the money you plan to borrow. To calculate your DTI, take your total monthly debt and divide it by your total gross monthly income. Generally, most lenders recommend you have less than 36%, however, the percentage varies based on the lender. A low debt to income ratio is highly favorable to lenders. When your debt exceeds your income, it is likely that you will not be approved for a loan because there is not enough money to make the loan payment.
Reach out to us today to help you calculate your debt to income ratio and develop an individualized plan to reduce your debt.
