Finance
The debt-to-income (DTI) ratio used in mortgage underwriting is calculated as:
AMonthly housing expenses ÷ monthly gross income
BTotal monthly debt obligations ÷ monthly gross income✓ Correct
CAnnual income ÷ total loan amount
DTotal assets ÷ total liabilities
Explanation
The back-end DTI ratio includes all monthly debt obligations (housing + other debts) divided by gross monthly income, expressed as a percentage. Lenders use this to assess repayment ability.
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