FAQ
DTI Ratio Explained: How Lenders Calculate Your Qualifying Debt
Debt-to-Income ratio (DTI) is the percentage of your gross monthly income that goes to monthly debt payments. Lenders use DTI to determine how much mortgage payment you can afford.
Details
The Full Answer
- Front-end DTI: proposed housing payment ÷ gross income
- Back-end DTI: all monthly debts + housing payment ÷ gross income
- Lenders use back-end DTI for approval decisions
- What's included: min credit card payments, auto loans, student loans, personal loans, proposed PITIA
- What's NOT included: utilities, subscriptions, grocery, gas
CTC's Role
How CTC Processing Handles This
CTC Processing calculates accurate DTI at intake and models scenarios to maximize qualifying ability. High DTI is a common processing challenge — CTC identifies payoff strategies and co-borrower options before submission.
Have more questions?
CTC Processing works with Colorado loan officers. Call 970-222-2615 or email ctcprocessingllc@gmail.com.
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