Question

What percent does a lender generally look for when considering the debt-to-income (DTI) ratio of a loan applicant? a. Less than or equal to 36% b. Less than or equal to 42% c. Less than or equal to 50% d. Less than or equal to 72%.

Answer 1

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.

Dept to income ratio

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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