Understanding Debt-to-Income Ratio (DTI): A Guide from The Stern Team
Understanding your debt-to-income ratio (DTI) is crucial when navigating the real estate market in Salt Lake City. The Stern Team, top real estate agents in Salt Lake City, explains what DTI is and why it matters in your home-buying journey.
What Is a Debt-to-Income Ratio (DTI)?
DTI is a calculation used by lenders to compare your total monthly debts to your total monthly income. It helps lenders assess your ability to manage monthly payments and repay borrowed money. Knowing your DTI provides insight into your financial health and readiness to buy a home.
What’s Included in DTI?
Monthly Mortgage Costs; Minimum Monthly Debt Payments, & Gross Monthly Income
What’s Not Included in DTI?
Non-recurring and non-essential debts like utility bills, car insurance, cable, cell phone bills, health insurance, and entertainment expenses are not included.
How to Lower Your DTI
Pay Off Existing Debt, Increase Your Income, Track Your Spending, Avoid New Debt
A lower DTI ratio can increase your chances of securing a better mortgage rate and terms, making your home purchase more affordable. The Stern Team, top realtors in Salt Lake City, can guide you through understanding and improving your DTI to help you achieve your real estate goals. Contact us today to learn more and start your home-buying journey with confidence.
