Monthly debt payments as a share of gross monthly income.
Lenders read DTI as your capacity to take on more debt. Conventional mortgages generally want total DTI ≤ 36–43%; lowering DTI is often faster via paying off small debts than raising income.
Formula: DTI = Monthly Debt ÷ Gross Monthly Income × 100
Example: $2,550 in payments on $7,500 income = 34% DTI.
FAQ
What is DTI in simple terms?
Lenders read DTI as your capacity to take on more debt. Conventional mortgages generally want total DTI ≤ 36–43%; lowering DTI is often faster via paying off small debts than raising income.
How is it calculated?
DTI = Monthly Debt ÷ Gross Monthly Income × 100. Example: $2,550 in payments on $7,500 income = 34% DTI.