ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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10%
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20%
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30%
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40%
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Detailed explanation-1: -Your debt-to-income ratio (DTI) compares how much you owe each month to how much you earn. Specifically, it’s the percentage of your gross monthly income (before taxes) that goes towards payments for rent, mortgage, credit cards, or other debt.
Detailed explanation-2: -Here’s a simple two-step formula for calculating your DTI ratio. Divide the sum of your monthly debts by your monthly gross income (your take-home pay before taxes and other monthly deductions). Convert the figure into a percentage and that is your DTI ratio.
Detailed explanation-3: -Your debt-to-income ratio (DTI) is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to manage the monthly payments to repay the money you plan to borrow.
Detailed explanation-4: -The front-end DTI is typically calculated as housing expenses (such as mortgage payments, mortgage insurance, etc.) divided by gross income. 2. A back-end DTI calculates the percentage of gross income spent on other debt types, such as credit cards or car loans.