Finance
Which of the following best describes a buyer's debt-to-income (DTI) ratio?
ATotal assets divided by total liabilities
BMonthly gross income divided by total monthly debt payments
CTotal monthly debt payments divided by gross monthly income✓ Correct
DNet monthly income divided by monthly housing payment
Explanation
The DTI ratio compares total monthly debt payments (including the proposed mortgage) to gross monthly income. Most conventional loans require a DTI of 43% or lower, though some loan programs allow higher ratios.
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