• James Robinson CFP

Your Monthly Debt To Income Ratio

Updated: Mar 22, 2020

Along with your Credit Score, your lenders will use your monthly debt to income ratio to access your ability to manage the payments you make every month to repay the money you have borrowed.

Higher DTIs generally mean you’ll pay more interest, or you may be denied a loan.

Debt-To-Income Ratio (DTI) compares how much you owe each month to how much you earn monthly.

Lenders use various calculators, some more complicated than others. However, DTI is simply the percentage of your gross monthly income (before taxes) that goes towards payments for rent, mortgage, credit cards, or other debt.

DOWNLOAD the Debt-To-Income Ratio (DTI) Worksheet

Download the DTI Excel Spreadsheet from our website here: DTI Spreadsheet.

Spreadsheet are better viewed on tablets and PCs. However if you must use your mobile phones. Same instructions apply but you should use Google Sheets or Excel mobile App to use the spreadsheet. Go to the app store on your phone and download the app of your choice.

Steps To Get You Where You Need To Go

Note: Just replace the “SAMPLE INFO” in the easy entry ‘Monthly Debt Payments’ section and the ‘Monthly Income’ section with your own information. Enter ‘zeroes’ in amount section if it does not apply to you. The sample info just helps you to visualize what the worksheet will do for you.

STEP 1: Click or Touch ‘Monthly Debt Payments’ at bottom of worksheet.

Include Rent or House Payment, Time Share or Vacation Property payments, Alimony or Child Support, Student Loans, Auto Loan Payments, Bike or Snowmobile Loans, Credit Cards 'Minimum' Payments, TSP and 401(k) Loans and Payday Loans.

Caution: DO NOT include expenses like groceries, utilities, gas, or federal and state taxes.

STEP 2: Click or Touch ‘Monthly Income’ at bottom of worksheet. Enter your monthly income in lower half. The top portion (With Graph) automatically calculates.

Include Alimony- Child Support Income, Disability Income, Investment and Rental Income, Monthly Salaries (Before taxes), Pension or Social Security and other income.

STEP 3: Now look up above. You should see your Debt-To-Income Ratio (DTI).

If it is above 43%...seek professional help to help bring this financial fever down as this number will impact Lenders decisions and possibly your VA loan. It is possible to get a VA or FHA loan with a higher ratio, but only when there compensating factors.

REMEMBER: Most civilian banks and credit unions are comfortable with a debt-to-income ratio of 35% or lower. Use This SIMPLE and Easy Monthly Debt To Income Ratio Worksheet

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