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Figuring out debt to income

New Visitor

Figuring out debt to income

Can someone tell me which of my bills calculate this?

I have 4000 left on a student loan that I pay, 850 rent, about 100-200 reports on my 4 cards each month (total), no car payment (take Bart so I'm not sure they include that), 61300 salary

Thank you
Message 1 of 5
4 REPLIES
Senior Contributor

Re: Figuring out debt to income

If I understand it correctly (and someone please correct me if that's the case) DTI is calculcated with any recurring debt like loans, cc payments, mortgage, and so on. In your case depending how much your payment is on your student loan I would take that amount and add the other amounts you already provided to the rought estimate of $1050. Then take that total and divide by the ~$5000 a month you make and that will more or less determine your DTI.

FICO 08 Scores (Mar-18): TU 796, EQ 798, EX 789

Message 2 of 5
Moderator

Re: Figuring out debt to income

DTI is rent or mortgage+car payment+min cc + any other loan payments (all monthly) divided by gross monthly income.  This is what banks use to determine your DTI

Chase | Citibank | Amex | BofA | PenFed | NFCU | Discover | Barclay's | US Bank | Fifth Third Bank | FNBO
Message 3 of 5
Community Leader
Legendary Contributor

Re: Figuring out debt to income

Additionally, if the DTI is being calculated as part of a mortgage underwriting process, such as FHA, there may be various regs that provide for inclusion in the DTI calculation a percentage of amounts owed on reported collections.

Calculation of DTI has various factors that are dependent upon the intended use of the ratio.

Message 4 of 5
New Contributor

Re: Figuring out debt to income

Here is how we Loan Officers figure out your DTI

 

H - House Payment

D - Debt

I- Income

 

Top Ratio = H divided by I

Bottom Ratio (commonly referred to at DTI) = H + D divided by I

 

In your case your DTI can differ due to your student loan payment. For FHA or USDA RDL, for example we are no longer able to use an IBR we have to hit the borrower with a min 1% payment of the current balance if the payment is not fully amortized. VA still allows deferrment or forbarance. Conv loans allow what is being reported on the credit report as the payment. Hope this helps.

 

 

 

Mortgage Banker - Since 1988 offering FHA, VA, USDA, Conventional, Jumbo and Portfolio Loan Products. Licensed in AL, AZ, CA, FL, GA, IL, IA, IN, KY, LA, MI, MO, NC, NE, NV, NJ, OH, OK, OR, PA, SC, TN, TX, VA and WI. If you need assistance in another state, please contact me and I can refer you to one of my Team Members.
Message 5 of 5