Debt-to-Income Ratio
Home Loan Tips

What is a debt-to-income ratio?

All people considering refinancing need to understand how DTI or "debt to income ratios" is determined. Underwriters across the country use the "debt to income ratio" to compare the amount of your debt (minus your mortgage payment) to your gross income. In most cases, the ratio is calculated on a monthly basis. For example, if your monthly income is $2,500 (gross income) and you have $500 a month in obligations for loans and credit cards, your debt-to-income ratio is 20 percent ($500 divided by $2,500 = .20).

Debt-to-income ratio relates your liabilities to your personal income.

Debt-to Income Ratio = Total Debt Payments / Monthly Gross Income

How do I calculate my debt-to-income ratio?

The first step in calculating your debt-to-income ratio is figuring your gross monthly income, which is the amount you earn prior to all deductions. If you're paid every other week, multiply your take-home pay by 26, then divide by 12. This is your monthly take-home pay.

If your revenue is unstable, calculate your monthly net pay by dividing the previous year's annual net pay by 12.


Preferred Loan Type
Property Type
Property Value
Credit Rating

BD Nationwide Mortgage, 515 Encinitas Blvd. Ste 100, Encinitas, California 92024
Please be aware that this is not an advertisement for credit as defined by paragraph 226.24 of regulation Z. Nothing on this site contains an offer to make a specific home loan for any purpose with any specific terms. This is a web-site and no loans can be guaranteed as loans and rates are subject to change. Nationwide is affiliated with national lenders and a federally chartered bank located in Maryland licensed to offer home loans in all 50 states. Copyright 2001-2010 and Beyond, Nationwide Mortgage Loans - is a website and cannot make loans. All rights reserved.