Debt-to-Income
DTI
Debt-to-income ratio compares monthly debt payments to gross monthly income. Lenders use it to evaluate a borrower's ability to repay a loan.
Lower DTI ratios typically improve approval odds and pricing. DTI is especially important in mortgage and auto loan underwriting.
Related Terms
Underwriting
Underwriting is the process of evaluating a borrower's risk and deciding whether to approve a loan. ...
Mortgage
A mortgage is a loan used to purchase real estate, where the property serves as collateral. The borr...
Credit Score
A credit score is a numerical rating that represents a person's creditworthiness based on their cred...
Loan-to-Value
LTV
Loan-to-value ratio compares the loan amount to the value of the collateral. It measures how much of...
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