Finance
The debt-to-income (DTI) ratio used by lenders compares:
AMonthly mortgage payment to gross monthly income
BTotal monthly debt payments to gross monthly income✓ Correct
CTotal debt to total assets
DAnnual income to property value
Explanation
The back-end DTI ratio compares total monthly debt obligations (including the proposed mortgage payment) to gross monthly income. Conventional loans typically require a DTI of 43% or less.
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