Use this calculator to determine your debt to income ratio. Generally speaking, a debt ratio greater than or equal to 40% indicates you are not a good risk for lending money to.

Debt-To-Income (DTI) ratios are used to determine how much of a burden a borrower may be taking on including the existing minimum credit account payments, the new payments of the home loan, plus the monthly portion of taxes and homeowners’ insurance premiums.

Generally speaking, the higher the DTI ratios, the more burden the borrower is applying for, and the riskier it is to the lender that the borrower may at some point fail to consistently make all of their payments. Higher DTI ratios frequently result either in restrictions upon the loan amounts offered by the lenders, or a higher interest rate priced to compensate the lender for the risks, or even both.

In some cases, unverifiable income may be considered with alternative-documentation loan programs in order to reflect a truer, lower DTI ratio than a borrower may otherwise be presenting to the lender in their application file.