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DTI ratio

Established Member

DTI ratio

What bills are used to determine the DTI?  I have a car payment and one credit card That shows up on my credit report.  Then I have the usual rent, utilities and such.

6 REPLIES
Valued Contributor

Re: DTI ratio

Basically anything that you're obligated to pay, so things like utilities don't count because you could technically cancel them at any time. They just go by whatever minimum payments appear on your credit report, but you're supposed to also disclose any other obligations you have tha don't appear (like payment arragements for a judgment or tax lien). They won't count your current rent, but they will count whatever the new mortgage payment (including principle, interest, taxes, insurance) will be.

Valued Contributor

Re: DTI ratio

+1, it is also known as the back end ratio and usually lenders want it to be 41-43% max, but it depends on the loan product.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Contributor

Re: DTI ratio

What is front end ratio?
Valued Contributor

Re: DTI ratio

Front end ratio is the PITI (principle, interest, taxes, insurance). The guideline is usually 31% of your monthly income, while back end (PITI + all other monthly debts) is usually 43%.

Valued Contributor

Re: DTI ratio

While what Mike said is true it also depends on the loan program.

Different requirements for different types of loans.
Good Luck
May all your dreams and wishes become a reality!
Valued Contributor

Re: DTI ratio

Right. And the front and back end ratios are computed using your gross monthly income before taxes. Each lender has their own guidelines on what the max ratio should be.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014