A Nevada borrower's loan application shows a gross monthly income of $7,500 and total monthly debt payments of $2,850 including proposed housing costs. What is the debt-to-income (DTI) ratio?

Explanation

DTI = Total Monthly Debt ÷ Gross Monthly Income = $2,850 ÷ $7,500 = 0.38 = 38%. The back-end DTI (total debt including housing) of 38% is within conventional loan limits (typically 43–45% maximum, with some programs allowing up to 50%). The front-end DTI (housing costs only) is also important. Nevada lenders use these ratios to evaluate borrower capacity. Understanding DTI calculations is essential for Nevada licensees advising buyers on mortgage qualification and affordability.