Understanding debt-to-income ratio and its implications for loan eligibility.
Debt-to-Income Ratio Explained
The debt-to-income (DTI) ratio is a personal finance measure that compares an individual's monthly debt payment to their monthly gross income.
Significance in Loan Applications
Lenders use DTI ratios to gauge a borrower's ability to manage monthly payments and repay the loan.
Improving Your DTI Ratio
Paying off debt and increasing income are straightforward ways to improve your DTI ratio, making you a more attractive candidate for loans.
Through years of advising clients, I've found that a lower DTI ratio opens doors to better loan opportunities.
Before applying for loans, work towards a lower DTI ratio for greater financial flexibility.