A Better Way to Manage Your Everyday Money - Book - Page 251
Chapter 13: Debt-to-income Ratio
Your debt-to-income ratio (DTI) is your monthly debt payments divided by your gross
monthly income expressed as a percentage.
Your DTI ratio is one way that lenders measure your ability to handle the monthly payments to
repay money you are asking to borrow. While debt-to-income ratio standards used by vendors
vary, a typical interpretation of your DTI by a lender could be:
● 35% or less: Your debt is at a manageable level.
● 36% to 49%: You’re managing your debt, but lowering your DTI is encouraged.
● 50% or more: Your money for spending and saving is probably limited.
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