Your Debt to Income Ratio, shows lenders just how likely you are to repay your loan.

Lenders will look at two types of DTI ratios when you are applying for a mortgage:

• The Front End Ratio

This is the percentage of your income that goes towards housing expenses, which includes your mortgage payments & homeowner’s insurance.

• Back End Ratio

This is the percentage of your income that is needed to pay off your Front End Ratio as well as monthly debts ie Credit Card bills etc.

If your DTI ratio is too high, it may be hard to have the financing approved.

There are many good calculators in the market that can help you determine your DTI and if necessary, provide the impetus to work toward a more attractive DTI for lenders, when you make your next application for financing.

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