Dept to income (DTI) is the ratio which refers the percentage of the gross monthly income which is used to pay the monthly dept payment. The percentage a lender generally look for when considering the debt-to-income (DTI) ratio of a loan applicant is less than or equal to 36 percent. Thus option A is the correct option.
<h3>Dept to income ratio</h3>
Dept to income (DTI) is the ratio which refers the percentage of the gross monthly income which is used to pay the monthly dept payment. Dept to income ratio is a measure of financial that compare the amount of dept to the overall income.
A lender generally look some of the following things for when considering the debt-to-income (DTI) ratio of a loan applicant-
- Lender looks for a low dept-to-income because with small dept to income ratio can be successfully mange monthly payments.
- Lender prefer to look a 36 percent or smaller dept-to-income with not more than 28 percent of that dept going towards servicing your mortgage.
- Back end ratio must be no more than 36 percent(including all monthly dept) and front end ratio must be no more than 28 percent.
Hence the percentage a lender generally look for when considering the debt-to-income (DTI) ratio of a loan applicant is less than or equal to 36 percent. Thus option A is the correct option.
Learn more about the dept to income ratio here;
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