Finance
What is the debt-to-income ratio used for in mortgage underwriting?
ATo determine the property's market value
BTo measure the borrower's ability to repay the loan✓ Correct
CTo calculate the required down payment
DTo establish the interest rate
Explanation
The debt-to-income (DTI) ratio compares a borrower's monthly debt payments to their gross monthly income, helping lenders assess the borrower's ability to handle mortgage payments.
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