Debt Ratio

How do you calculate Debt Ratio? I'm looking for the formula that most bankers or loan officers use.

Thanks!
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Comments(10)

  • myfrogger11th May, 2004

    Most lenders do not want your PITI (princiapl, interest, tax, and insurance) payment per month to be more than 35% of your total montly income. That percentage varies among lenders and their individual loan programs

  • tinman175511th May, 2004

    Add up all of your liabilities.
    Find your gross pay a month
    EX:

    Gross pay $5000.00 a month
    All payments= 1254
    DR=25.08%


    Lori
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  • ddemott12th May, 2004

    So does that include your phone bill and your electric bill, or are you talking you loans only?
    Quote:
    On 2004-05-11 18:44, tinman1755 wrote:
    Add up all of your liabilities.
    Find your gross pay a month
    EX:

    Gross pay $5000.00 a month
    All payments= 1254
    DR=25.08%


    Lori

  • vasiliy13th May, 2004

    Your deb ratio will include everything that shows up on your credit report plus the PITI for the house or rent amount.

    I have never seen electric bills be part of your debt ratio calculation.

    Hope this helps.
    Vasiliy

  • tinman175513th May, 2004

    Debt ratio includes:
    revolving
    30 day accounts
    installment loans
    credit lines
    mortgages
    taxes & insurance (if homeowner)
    rent payment

    Lori
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  • j_owley3rd July, 2004

    that would also include alimony

  • GregTanner6th July, 2004

    Some lenders will allow up to 50% DTI. This is mostly in the subprime industry which is what I specialize in.

  • cjmazur6th July, 2004

    there's the front end, which include only housing debt, and the backend which include all debt.

    so a lender my have a program that's 33/45.

    33% of income spend on housing, 45% total in debt.

  • gldstwmn7th July, 2004

    Quote:
    On 2004-07-06 01:28, GregTanner wrote:
    Some lenders will allow up to 50% DTI. This is mostly in the subprime industry which is what I specialize in.


    Long Beach will go to 55 if the ltv is low enough.

  • watchbillw8th July, 2004

    There is front end and back end hence the 33/45
    front end is without piti

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