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% of income, and don't want all debt payments (house, auto, credit cards, student loan) to exceed 36% of income. Thresholds can vary by lender.