Finance
A buyer's debt-to-income (DTI) ratio is calculated as:
AMonthly housing expenses ÷ monthly gross income
BTotal monthly debt payments ÷ monthly gross income✓ Correct
CTotal loan amount ÷ annual income
DMonthly savings ÷ monthly take-home pay
Explanation
The debt-to-income (DTI) ratio is calculated by dividing total monthly debt payments (including proposed housing expense) by gross monthly income. Most conventional lenders prefer a DTI of 43% or less.
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