Applying for a mortgage (and shopping for the best interest rate) can be a complicated process, whether you’re a first-time homebuyer or a seasoned pro. Your debt-to-income ratio (DTI) is one factor lenders consider when deciding whether to approve you for a mortgage, and what rate to offer you if your application is approved. Put simply, DTI is a mathematical way to compare your monthly debt payments vs. your monthly income.
Other factors mortgage lenders consider when you apply include your credit score, your down payment, your employment history, and more. This guide is focused on DTI, as it’s crucial to understand how to calculate your DTI and how your DTI can impact your chances of getting the mortgage terms you’re hoping…
