What Is Debt-to-Income Ratio (DTI)?
The percentage of monthly gross income that goes toward debt payments.
Debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes toward paying debts, including mortgage or rent, car payments, student loans, credit card minimums, and any other recurring debt obligations. Lenders use DTI to evaluate whether a borrower can afford a new loan. In divorce, DTI is particularly important when one spouse wants to keep the family home and needs to refinance the mortgage in their name alone. Most lenders prefer a DTI below 36%, and many require it to be under 43% to qualify for a conventional mortgage. For someone transitioning from a two-income household to a single income, DTI often increases significantly — making it harder to qualify for a refinance even if the current mortgage payment is manageable.
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View CalculatorsThis definition is for general educational purposes only and does not constitute legal or financial advice. Laws vary by state and change frequently. Consult a qualified professional for guidance specific to your situation.
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