Finance
A buyer's debt-to-income (DTI) ratio is calculated as:
AMonthly housing expense divided by gross monthly income
BTotal monthly debt payments divided by gross monthly income✓ Correct
CNet income divided by total assets
DMonthly savings divided by monthly expenses
Explanation
The back-end DTI ratio is total monthly debt obligations (housing + all other recurring debts) divided by gross monthly income. Most conventional loans require a DTI at or below 43–45%.
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