Debt-to-Income Ratio

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • front-end ratio
  • back-end ratio

Definition of Debt-to-Income Ratio

  1. A ratio used to show how much of an individual's income goes toward debt repayments. The Debt-to-Income Ratio (DTI) can be used by lenders to determine an applicant's ability to repay a loan.

Related Terms and Acronyms

  • Loan Bank,
    • Letting another party use something of value temporarily.
  • Debt/Equity Ratio Bank,
    • A comparison of debt and equity used to measure the health of a business.
  • Mortgage (mtg) Abbreviation, Important,
    • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • Debt Bank,
    • Money one person or firm owes to another person or firm.
  • Income Bank,
    • The money earned in a specific time period.
  • Gross Debt Service (GDS) Acronym, Very Important,
    • The total monthly mortgage (or rent) payments, property taxes, utilities and maintenance fees as a percentage of gross monthly income.
    Used by mortgage lender underwriters to determine one's ability to qualify for a mortgage loan.
  • Total Expense Ratio (TER) Bank,
    • The percentage of monthly debt payments compared to total before-tax income.
  • Total Debt Service (TDS) Acronym, Important,
    • The ratio of a borrower's total monthly debt payments to his or her monthly gross income. Lenders use this ratio to determine how much of a loan a borrower is qualified for.
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