Debt-to-income ratio compares income generated in a specific period with debt that must be paid during the same period. It helps determine the amount of additional debt that can be taken on without creating financial hardship. Lenders set a percentage range for the ratio, with a ratio greater than 50% resulting in loan rejection. The […]

The debt-to-income ratio compares income to debt for a given period, useful for budgeting and assessing a borrower’s ability to take on additional debt. There are two types: front-end and back-end, with lenders setting a percentage range for approval. Variable charges must be disclosed. The debt-to-income ratio is a simple comparison between the income generated […]