mortgage

For PITI's sake: Mortgage acronyms defined

Mortgage » For PITI's sake: Mortgage acronyms defined

DTI
DTI © iStock

DTI

A debt-to-income ratio, or DTI, is how a lender determines how much a borrower can afford to pay every month. By dividing the borrower's monthly liabilities by monthly income before taxes, the lender arrives at a percentage. To qualify for the mortgage, borrowers usually need to fall below certain thresholds.

Typically, lenders don't want the monthly house payment to exceed 28 percent of income, and don't want all debt payments (house, auto, credit cards, student loan) to exceed 36 percent of income. Thresholds can vary by lender.

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
From LTV to PITI: Speak your mortgage lender's language
advertisement

Connect with us