Finance
The debt-to-income (DTI) ratio used by lenders is calculated as:
AMonthly income divided by monthly debt payments
BTotal monthly debt payments divided by gross monthly income✓ Correct
CAnnual debt divided by property value
DCredit card balances divided by annual salary
Explanation
DTI = Total monthly debt payments (including proposed housing payment) ÷ Gross monthly income. Most conventional lenders prefer a back-end DTI of 43% or less.
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