Finance
What is the debt-to-income (DTI) ratio used for in mortgage lending?
AMeasuring the property's income potential
BAssessing a borrower's ability to repay by comparing monthly debt payments to gross monthly income✓ Correct
CCalculating the property's cap rate
DDetermining property tax rates
Explanation
DTI ratio compares a borrower's total monthly debt payments to their gross monthly income, helping lenders assess ability to repay. Most conventional loan programs require a DTI of 43% or less.
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