How do i figure dti

You may also want to look into a debt management plan from a nonprofit credit counseling agency. Such agencies typically offer free consultations and will help you understand all of your debt relief options. Weigh different debt relief options, including bankruptcy, which may be the fastest and least damaging option. How to calculate your debt-to-income ratio. Track your debt the easy way.

Sign up for NerdWallet to see your debt breakdown and upcoming payments. Get started. How lenders view your DTI ratio. Does your DTI affect your credit score? In reality, depending on your credit score, savings, assets and down payment, lenders may accept higher ratios, depending on the type of loan you're applying for. That means half of your monthly income is going toward housing expenses and recurring monthly debt obligations. Credit bureaus don't look at your income when they score your credit so your DTI ratio has little bearing on your actual score.

But borrowers with a high DTI ratio may have a high credit utilization ratio -- and that accounts for 30 percent of your credit score.

Credit utilization ratio is the outstanding balance on your credit accounts in relation to your maximum credit limit. Ideally, you want to keep that your credit utilization ratio below 30 percent when applying for a mortgage. Note: Expenses like groceries, utilities, gas, and your taxes generally are not included. See the FAQs for more information. The result is your DTI, which will be in the form of a percentage. The lower the DTI; the less risky you are to lenders.

For more information, see Understand what your ratio means. Get Started. This calculator is for educational purposes only and is not a denial or approval of credit. Don't see what you're looking for? Browse related questions What is a Qualified Mortgage?

What is the ability-to-repay rule? Why is it important to me? Learn more about mortgages.