Finance
The debt-to-income (DTI) ratio is used by lenders to:
ADetermine the loan-to-value ratio
BMeasure a borrower's monthly debt obligations relative to gross monthly income✓ Correct
CCalculate the interest rate on the loan
DDetermine the amount of the down payment required
Explanation
DTI compares a borrower's total monthly debt payments (including the proposed mortgage) to their gross monthly income. Lenders use it to assess repayment ability. Most conventional loans require a DTI below 43-45%.
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