Finance
What is the debt-to-income (DTI) ratio a lender uses to qualify a borrower?
AMonthly gross income divided by monthly debt payments
BMonthly debt payments divided by monthly gross income✓ Correct
CAnnual income divided by total loan amount
DMonthly net income minus monthly expenses
Explanation
The debt-to-income ratio compares monthly debt obligations (including the proposed mortgage payment) to monthly gross income. Most conventional loans require a DTI of 43% or less.
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